SYDNEY, Oct 27 (Reuters) - Toxic dioxin waste in levels exceeding international safety standards by more than 1,000 times has been found on land near the Sydney 2000 Olympic site.

Sydney Olympic officials said on Monday the waste was found in recent months in soil contaminated by corroded drums of dioxin which was dug up during work at North Newington, adjacent to the vast Olympic construction project.

New Zealand laboratory tests of the dioxin found a toxic waste equivalent of 1,540 parts per billion (ppb), but there was no trace of the most deadly dioxin 2,3,7,8 TCDD, which has been found on the Olympic site in western Sydney.

The U.S. safety level for all dioxin in surface soil is 1.0 ppb, based on the potential for dioxin to cause cancer.

The same safety level applies for the Australian state of New South Wales, host of the Olympics.

"Scientific studies have shown it is likely we will find contaminated material in landfill on some parts of the site," said David Richmond, director general of the Olympic Coordination Authority, which is building the Olympic site.

"No one can predict exactly what will be found until it is tested," said Richmond, citing the fact the Olympic site of Homebush Bay was used as a toxic waste dump from 1949 to 1976.

News of the high levels of dioxin comes as International Olympic Committee (IOC) officials inspected the Sydney Games site on Monday.

IOC official in charge of the Sydney Games, Jacques Rogge, said he was satisfied that Sydney Olympic officials were upholding their commitment to deliver the "Green Games."

"We are happy with what Sydney has done," said Rogge. "You have to look at it on a positive side, if you had no Games probably this site would still have been a very polluted area," Rogge told reporters at the site.

The OCA is spending A$137 million (US$94 million) on cleaning up Homebush Bay and a further A$21 million on the waters of Homebush Bay, which contain leached dioxin.

In July, the OCA released an environment report which revealed 2,3,7,8 TCDD buried in 12 locations on the Olympic site. One site was adjacent to the Olympic Village, which will house more than 15,000 athletes and officials.

Concentrations of all forms of dioxin found at Homebush Bay ranged from less than 1.0 ppb to 67.5 ppb, with 2,3,7,8, TCDD concentrations ranging from 0.0013 ppb to 2.6 ppb.

But the report warned the full extent of toxic waste was unknown at Homebush Bay.

Dioxin, used in Agent Orange during the Vietnam War, was produced at a Union Carbide chemical factory adjacent to the Olympic site. The dioxin waste was then buried in landfill or left in drums scattered above ground.

Environmentalist campaign group Greenpeace found 50 drums of dioxin -- some with gaping, rusting holes -- when it raided Homebush Bay in June.

According to the environment report between 200 to 300 tonnes of waste containing four to 30 kgs of 2,3,7,8 TCDD was disposed in three locations in Sydney, one of which was Homebush Bay. (A$1 - US$0.68)