Dangerous friable asbestos has been found at a central Sydney park as companies are threatened with higher fines for illegally handling the material.

Asbestos has been detected in recycled mulch at multiple sites in NSW, including schools, hospitals, train stations and parks, after the initial discovery of bonded asbestos at the Rozelle Parklands in Sydney’s inner west in January.

Three more parks in and around the city centre have been cordoned off or closed temporarily after tests revealed mulch there had been contaminated with asbestos.

Premier Chris Minns said recent discoveries at Campbelltown Hospital, in Sydney’s southwest, as well as at an inner-city park, where traces of the more dangerous friable asbestos had been detected, were unacceptable.

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

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.

“The government is currently investigating certain actions that we will take in the weeks ahead, firstly, to raise the fines that are imposed on companies that do the wrong thing,” Minns said.

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.

The City of Sydney council late on Monday said it became aware its suppliers might have received contaminated mulch.

Five parks in the council area were tested, including Victoria Park at Broadway, Belmore Park near Central Station, Harmony Park and Prince Alfred Park in Surry Hills and Pope Paul VI Reserve in Glebe.

Friable asbestos was found in mulch at Harmony Park, which would be temporarily closed while the site was cleaned.

Tests also found bonded asbestos at Victoria Park and Belmore Park.

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

More than 100 sites across Sydney have been tested by the state’s Environmental Protection Authority, leading to at least 13 positive results for bonded asbestos.

The EPA would defend orders it had issued against an identified supplier of recycled mulch, which was challenging the measures in court, Mr Minns said.

The agency is also 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.

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

– AAP