Dangerous friable asbestos has been found at a central Sydney park, the latest in a string of detections at multiple sites across NSW after the initial discovery of bonded asbestos at the Rozelle Parklands in Sydney’s inner west in January.

The City of Sydney council confirmed friable asbestos was found in mulch at Harmony Park, which would be temporarily closed while the site was cleaned.

Bonded asbestos was discovered in mulch at Liverpool West Public School, in Sydney’s southwest, over the weekend, forcing the school to close for at least two days while the material was removed.

Tests also found bonded asbestos at Victoria Park and Belmore Park as well as in a garden bed at the Parramatta Light Rail site at Telopea.

The council said the recycled mulch product was used in garden beds and under trees, but not in playgrounds.

Premier Chris Minns said the discovery of friable asbestos in a park, along with the other recent finds, was unacceptable.

“That kind of asbestos being found in a park in Sydney is deeply worrying,” he said on Tuesday.

Concerns were raised on Monday about the use of granular construction and demolition waste as a soil substitute at playgrounds, childcare centres and other areas of NSW.

About 700,000 tonnes of recovered fines [potentially contaminated product] are reused in NSW every year, with about half likely to not pass compliance checks, Greens MP Sue Higginson said.

She called for better resourcing of the environment regulator so asbestos and other potentially hazardous materials could not be reused.

Higginson said Victoria closely tracks hazardous materials and holds polluters to stringent liability, while Queensland sends contaminated products straight into landfill.

“We should be doing better than both of those states,” she said.

“We need strong regulations, a resourced and empowered regulator, and we need a system that protects people and the environment from harmful products.”

Previous finds have been limited to the less-dangerous bonded asbestos, which is mixed with concrete or resin.

Friable asbestos can easily crumble into dust and become airborne, creating a potential health risk.

 “Until we can have confidence that mulch and soil suppliers are free from asbestos, and other harmful materials, there must be a moratorium on moving soil and mulch to sensitive areas without chemical testing,” NSW Greens MP Sue Higginson, who has lectured and taught environmental law in universities across the state, says.

Minns said the Government is currently investigating certain actions that it will take in the weeks ahead, firstly, to raise the fines that are imposed on companies that do the wrong thing.

Current penalties of up to $2 million for corporations were already steep, but the Government was prepared to go further, he said.

“I’ve got to make a decision about whether these penalties are being incorporated in the cost of doing business, which sometimes happens,” Minns said.

But one landscaping supply company, Greenlife Resource Recovery, has launched an appeal against a prevention notice issued by the NSW Environmental Protection Authority after the watchdog determined it supplied the mulch used at Rozelle.

The company said its testing showed mulch stockpiled at its facility was free of asbestos contamination and it was confident the material was also clean when delivered to contractors for landscaping.

“The company has no visibility of, and does not control, how its mulch is used on a site once delivered,” it said in a statement.

Greenlife has engaged environmental law specialist Ross Fox, which said the company was “at risk of being made a scapegoat for failures in a complex supply chain for construction and landscaping projects”.

Minns said the EPA intended to defend its orders against the company in court.

The agency is investigating a potential mass recall, which the premier said was also likely to face legal challenges and required NSW authorities to work with the Commonwealth.

NSW EPA chief executive Tony Chappel said the whole supply chain was under scrutiny.

“But we are talking about very small quantities that appear to have managed to find their way into the process,” he told Sydney radio 2GB on Tuesday.

Elsewhere, Fair Day, the rampant rainbow extravaganza headlining the first weekend of Sydney Mardi Gras, has been cancelled due to concerns over the asbestos-tainted mulch.

More than 70,000 people were expected to descend on Victoria Park on Sunday for the day-long night festival.

Lord Mayor Clover Moore said the decision to cancel the event underscores how seriousness of the matter.

“The NSW government and the EPA must make sure this never happens again,” she said.

“Fair Day is a pivotal part of the Mardi Gras calendar. But we have to put the safety of our community first.”

More than 100 sites across Sydney have been tested, leading to at least 13 positive results for bonded asbestos.

The EPA probe has grown to involve 120 investigators, who are working to trace the supply of mulch.

(With AAP)