Well-known brands in the West have been linked to unpaid Chinese prison labour in a Sky News investigation.

Both Coca-Cola and the giant US retailer Wal-Mart have been implicated in the prisons practice of forcing inmates to work - although the Chinese Embassy in London denies the claims.

Businessmen in Zhejiang Province in southern China told Sky News that finding prison labour was not a problem.

The private companies pay the authorities; the jails provide the labour; and the prisoners are paid nothing.

Human rights groups have condemned the use of forced labour in China's jails, which has been likened to modern-day slavery.

Briton John Sims was sent to prison in Ningbo last year on what he describes as trumped up charges. He found himself on a prison production line making Coca-Cola-branded Christmas decorations.

"I was blown away. You don't go into prison anywhere in the world to see Coca-Cola products being made," he said.

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Secret footage of the 'slave labour'

"Foreign companies using prison labour in China is a no-no, especially American companies."

His pay was an apple a month.

Sky News has obtained mobile phone footage of prisoners huddled around a table assembling what appeared to be Coca-Cola branded decorations.

Filmed secretly and smuggled out of jail this was visual proof of the existence of what amounts to modern day slavery within the Chinese prison system

In a statement to Sky News, Coca-Cola says it has discontinued its relationship with the maker of the Christmas decorations and does not accept the use of prison labour, including by its suppliers.

Dr Xu Yonghai was jailed for two years for his Christian beliefs. He took us back to prison in Zhejiang Province where he was put to work making umbrellas. He was paid 60p a month for his labour.

"Those who worked slowly were beaten," he said.

"They were beaten very badly. Beaten on the face with a shoe. Some people were beaten every day."

Dr Su took us to a local Wal-Mart store where we found umbrellas of the same brand as those he worked for on sale.

Wal-Mart told Sky News it has a strict policy against forced labour and has launched an immediate investigation of the supplier concerned.

It is impossible to know just how many Chinese jails are using slave labour for profit.

But what is clear is that Western companies, some of the biggest brands in the world, are now wittingly or unwittingly involved in this practice.

The Chinese Embassy in London rejected the allegations made by Sky News.

"This story is not based on hard facts, but out of sheer imagination," it said.

"There is no evidence provided that the blurred picture of a prison working site was taken in the detention centre of Ningbo, Zhejiang Province.

"The journalist did not prove that the two interviewees were really former prisoners, or that what they said was true."

It added: "The Chinese people cannot understand why the public should be misled in this way.

"The Embassy sincerely hope the media will not spread rumours against China, and do something more to promote understanding between the peoples of the two countries."