The arrest came just months after the Shanghai pension fund scandal ensnared scores of local government officials, including Shanghai's former Party chief, Chen Liangyu, as well as the wealthy businessman Zhang Rongkun.

The central government sent more than 100 investigators to Shanghai in the middle of this year to investigate the pension fund case. Their goal was to recover the misused money and investigate corrupt officials.

In late October, a 50-year-old man named Li Hailing sent threatening mails in the name of one of the Beijing investigators to "leading officials in various Party and government organs in Shanghai," claiming that they were under suspicion of being involved in the pension fund case, according to a report in the Yanzhao Metropolis Daily.

The letters ordered the officials to send money to designated bank accounts in Beijing if they wanted to avoid being investigated. No money had been deposited in the account when Li was arrested last week.

Police tracked Li down after he checked the bank accounts listed in the letters using ATM machines near his rural home in Hebei, a neighbouring province of Beijing, and managed to confirm his handwriting, the newspaper said.

According to the newspaper, Li had previously blackmailed various other government officials and corporate managers in Shanghai, Shandong and other provinces in Northeast China.