More than 50 bullet trains on a new fast link between Beijing and Shanghai will be recalled because of "flaws", their manufacturer said Friday, in a fresh blow for China's high-speed rail industry.

The move to pull 54 trains from the flagship line came a day after Beijing said it was suspending approval of new rail projects and cutting speeds on newly-laid track after a deadly collision of two high-speed trains last month.

The state-owned company said the recall would allow it to analyse problems that have plagued train services on the new line, which was built at a cost of $33 billion and only opened on June 30.

"China CNR Corp... is recalling 54 CRH380BL bullet trains produced by our subsidiaries that are already in operation to systematically analyse causes of flaws," the firm said in a statement filed with the Shanghai stock exchange.

The recall would allow it to "conduct an overhaul to ensure their quality and safety," said the statement, which was approved by the railway ministry.

It will affect around a quarter of services on the new line, which has suffered a series of delays and power cuts since its launch.

China's government has made the construction of the world's biggest high-speed rail network a key political priority and last month's crash, combined with problems on the Beijing-Shanghai link, was a major embarrassment.

The accident killed 40 people and sparked a public outcry amid allegations the government had disregarded safety concerns in its rush for growth.

The concerns have forced China to slam the brakes on the rapid expansion of its high-speed rail network, the biggest in the world at 8,358 kilometres (5,193 miles) at the end of 2010.

The government had planned for it to exceed 13,000 kilometres by 2012 and 16,000 kilometres by 2020, before the State Council, or cabinet, said on Wednesday it would halt the approval of new railway construction projects.

The government also ordered cuts to the speed of trains running on newly-built high-speed lines and said safety checks would be conducted on all existing fast links as well as those under construction.

The government has said a faulty signalling system was to blame and promised to conduct a thorough investigation into the disaster.

On Friday, the official China Daily newspaper quoted Luo Lin, the government minister heading the investigation team, as saying the accident was "completely avoidable" and likely caused by design defects.

State-owned China CNR Corp said earlier this week that the railway ministry had ordered it to halt shipments of the same train model as that involved in the recall after problems caused delays on the Beijing-Shanghai link.

The company said an automatic braking system was to blame.

The trains, which were made by CNR unit Changchun Railway Vehicles Co, were installed with sensors that sent alerts to automatically slow the train down, it said.

A spokesman for the company told AFP the trains affected were based on technology used in another model made in partnership with the German technology giant Siemens.

Tan Xiaofeng said the "small but widespread" problems with the CRH380BL model affected components including the trains' heat sensors and would not compromise safety, but could hit punctuality.

"They (heat sensors) worked fine in checks and trials. But once installed in the trains, they are likely to give wrong warnings as affected by the environment," he said.

The chairman of the CNR board Cui Dianguo told state news agency Xinhua the company would begin taking the trains out of operation on August 16 and would share the cost of the recall with its suppliers, without identifying them.

The recall was the latest sign that concerns over the safety and reliability was taking a toll on China's rail manufacturing industry.

On Thursday another company, China Railway Group, said it had scrapped plans to raise 6.24 billion yuan ($975 million) in a private share placement.

The Hong Kong- and Shanghai-listed railway construction firm cited uncertainties about obtaining government approval for the share placement following changes in policy.

CSR Corp, the maker of the trains involved in the July crash, said Thursday two major shareholders would delay the public trading of the 6.52 billion non-tradable shares they held for three more years.