Federal prosecutors in Brazil are weighing possible criminal action after labor inspectors found 163 Chinese workers "in slave-like conditions" at the construction site in the northeast state of Bahia, a government statement said.

The workers, employed by BYD contractor Jinjiang Open Engineering, were viewed as "victims of international trafficking for the purpose of labor exploitation," said the statement.

A Chinese foreign ministry spokeswoman in Beijing, Mao Ning, said: "We have noted the relevant reports... and are currently verifying the situation."

She added that Beijing "attaches great importance to protecting laborers' legitimate rights and interests, and has always required Chinese enterprises to operate in line with the law and regulations."

On Thursday, BYD and Jinjiang were quizzed by Brazilian government ministries, which said "the companies committed to collaborate in protecting the rescued workers."

- Allegations denied -

On Monday, Brazilian officials said they had found labor violations at the site, which is being built to be BYD's largest electric car plant outside of Asia.

Bahia's regional ministry for works (MPT) ordered construction to be suspended at part of the site.

Inspections carried out since November found "degrading working conditions," including beds in workers' accommodation lacking mattresses, and one bathroom per 31 workers, an MPT statement said.

The workers, who spent long hours under the sun, had "visible signs of skin damage," the statement said.

The MPT added that it suspected "forced labor," with workers' passports confiscated and their employer "retaining 60 percent of their salary."

After the allegations were made public, BYD's Brazilian subsidiary said it had broken its contract with the Jinjiang subsidiary responsible for work on the site. It added that it had sent the 163 workers to stay in hotels.

Jinjiang on Thursday -- in a statement issued before the online hearing with Brazilian authorities -- denied the slavery allegation.

The company said the accusations "seriously damaged the dignity of Chinese people" and claimed it "made our staff feel seriously insulted and that their human rights have been violated."

Brazilian authorities said it was requiring Jinjiang to take the 163 workers to the police to register them in Brazil's tax system so they can be properly paid.

They also said the company must ensure that seven of the workers due to return to China on January 1 are given air tickets and $120 in travel expenses.

The Brazilian authorities said a new hearing was set for January 7 for the companies to present their remedies for the labor violations that were identified.

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BYD COMPANY