The makers of the official London 2012 Olympic mascots are under investigation after accusations that the cuddly toys, Wenlock, Mandeville and Pride the Lion, were made by sweatshop workers in China.

The London 2012 Olympics organising committee (LOCOG) is investigating Telford toy firm Golden Bear after allegations that workers making the mascots did so in sweatshop conditions, paid as little as 26p an hour whilst labouring for nearly 12 hours a day.

When the firm was awarded the licence to produce the mascots, it was understood that the toys would be made in China, but that distribution jobs would be created in Shropshire.

One of the mascots, Wenlock, was named after the town of Much Wenlock, also in Shropshire, which held its own Olympic-style challenges in the 19th century, becoming the forerunner to the modern games.

Golden Bear is also conducting its own probe into the allegations, after media reports slammed the firm for its treatment of its workers.

In a statement, Golden Bear Chairman John Hales said the firm was "extremely concerned".

"We are a family-run business that takes these issues very seriously indeed and has in place certificates of compliance at all factories used to produce our products," he said.

"We are therefore in the process of conducting an immediate investigation and will be able to comment on these findings as soon as they are known to us.

"We can confirm, however, that the factory in question has passed the ICTI (International Council of Toy Industries) care process inspection and that we will be working with the BTHA (British Toy and Hobby Association) ICTI care and other authorities in order to resolve any conditions that may have been breached."

A London 2012 spokesman said it placed a high priority on "environmental, social and ethical issues" and was taking the allegations "extremely seriously".

He said: "We have asked our independent monitor to carry out a comprehensive investigation and review of these allegations."