Organisers of the 2008 Beijing Olympics say they are investigating reports that children are being exploited in the manufacture of official merchandise.
Merchandise is expected to be worth hundreds of millions of dollars
Jiang Xiaoyu of the Beijing organising committee said that if the reports were true then the factories involved would lose their Olympic business.
A global trade union group has accused factories of using child labour, forced overtime and low wages to boost profit.
The four companies cited in the report have denied the allegations.
Two of the firms insisted to the BBC that they treated their workers well.
Mr Jiang, vice-president of the Beijing Games organising committee (BOCOG), said they were investigating the allegations.
"If a problem is discovered, we will handle it, in order to protect the reputation of the Olympic games and the Beijing Olympic committee," he told reporters in Hong Kong.
He said BOCOG had very "clear rules and regulations" in relation to labour laws, which all manufacturers of the merchandise had to sign up to.
"To use child labour is also clearly against government laws and regulations," Mr Jiang said.
Playfair - an alliance of world trade unions - said in its report that it had found "severe workers' rights violations" in factories licensed to make official Olympic caps, bags, stationery and other merchandise.
The report - entitled "No medal for the Olympics on labour rights" - said such violations included "adult wages at half the legal minimum [and] employment of workers as young as 12 years old".
It also alleged that workers were forced to do overtime, and lie about wages and conditions to outside inspectors and work in poor health and safety conditions.
"It brings shame on the whole Olympics movement that such severe violations of international labour standards are taking place in Olympics-licensed factories," Guy Ryder, general secretary of the International Trade Union Confederation, said.
The International Olympic Committee - which meets on Tuesday in the UK - said that while it did not have direct control over merchandise companies, host cities were expected to follow guidelines on fair labour standards.
"The IOC is committed to being a socially responsible leader of the Olympic Movement that takes care of the Olympic brand in the best way possible," it said in a statement.
"It matters to us that sourcing is done ethically."
The managers of two of the factories named in the report denied the allegations to the BBC.
Lekit Stationery, in Dongguan city, Guangdong Province, which is making Olympic paper cups, notebooks and stickers, was accused of employing children and forcing them to work up to 13 hours a day.
Chinese labour standards have long been criticised in the West
"It's not true," company manager Michael Lee said. "We work for some of the best brand names in the world and they check our company every month."
He said the factory's 420 workers earned a basic monthly salary of about 700 yuan ($91; £46) and overtime was paid at time and a half.
Mainland Headwear Holdings, on the outskirts of the city of Shenzhen, also denied any wrongdoing.
Production director Samuel Wai told the BBC: "We follow all the government regulations here so I'm not sure where these complaints have come from.
"Employees here enjoy a very good living environment and working conditions."
Employees living in nearby apartment buildings agreed with Mr Wai when spoken to by the BBC.
Eagle Leather Products in Guangdong, which makes Olympics-branded bags, was accused in the report of forcing staff to work 30 days a month plus overtime.
A woman at the factory, who identified herself as Ms Chang, told the Associated Press she "cannot agree with the report".
"Our plant is making bags for the Olympics. Our working hours are 8am to 6pm - no extended hours, no child labour."