ROME/BRUSSELS (Reuters) - Italy told the European Commission (EU) yesterday it had not exported any mozzarella cheese contaminated with cancer-causing dioxin, but it faced questions from consumers at home.

Seeking to avert a major food scare, Italian officials played down health risks for the public after checks found higher than permitted levels of dioxin at nearly one in five producers of mozzarella made from buffalo milk.

All 83 dairy farms supplying the affected mozzarella makers have been sealed off while tests are carried out to determine where the contaminated milk came from.

"There is no dioxin scare in Campania," Agriculture Minister Paolo De Castro said, eating bite-sized pieces of cheese for the cameras and blaming the scare on a "media frenzy".

"The checks have revealed a limited number of cases, 83 out of 1,900 (dairy farms), and the produce has been seized, so there is no health risk," he told reporters.

However, a consumer group advised Italians not to eat the cheese until the final results of the tests and the names of the producers concerned are made public.

A leading group of producers said sales were down 30 percent in the first two months of the year, with a revenue loss of 30 million euros.

Officials believe the dioxin levels are linked to a recent garbage crisis in Naples and the surrounding Campania region.

With dumps in the area full, locals burned piles of rubbish in the streets and in open fields. Health officials say industrial waste was also set ablaze, spreading fumes that in some cases contained dioxin, a toxic chemical.

Earlier, EU health and food safety spokeswoman Nina Papadoulaki said Brussels had received new information from Rome after setting a 5pm GMT deadline for complete disclosure on the mozzarella health scare.

"Apparently they are just in the local market, in the Italian market. They were not sent to third countries nor to the EU," she said, adding that dioxin levels were "higher than the EU legislation requires but it was not excessive".

Japan and South Korea have halted imports of buffalo mozzarella, one of Italy's best-known culinary products, over concerns about contamination.

Ms. Papadoulaki declined to say whether the EU's executive was satisfied with the new Italian reply, saying Brussels would wait until the deadline expired before determining whether it had received complete information.

"We will assess the situation by then and we will see whether further or any action needs to be taken," she said.

Possible measures the EU could take ranged from "safeguards such as the withdrawal of all products on the market in the region to a complete ban from the region", she said.

Italian officials have declined to specify how much, if any, of the tainted mozzarella had gone onto the domestic market, but said dioxin was only dangerous in large quantities.

"Even if a small part ended on the market, there would be no risk to public safety because the present levels of dioxin are not high," Health Ministry undersecretary Gianpaolo Patta told Reuters.

Roberto Fanelli, a dioxin expert at the Mario Negri Institute of Pharmaceutical Research, told Corriere della Sera newspaper that the contaminated mozzarella was not dangerous unless it was eaten in large quantities over several months.

"The alarm is exaggerated," he said.