China has suspended all new railway construction projects, as controversy swirls over the nation's high-speed network nearly three weeks after a fatal crash sparked safety concerns.

Rail authorities have also cut the speed of trains running on newly-built high-speed lines and will conduct safety checks on all existing fast links as well as those under construction.

"We will suspend for the time being the examination and approval of new railway construction projects," the State Council, or cabinet, said in a statement late Wednesday.

The government will also thoroughly examine projects that have already been submitted for approval, it added.

Developing the world's largest high-speed rail network has been a key political goal for Beijing, but the deaths of 40 people in a collision of two high-speed trains on July 23 provoked public outrage and forced it to rethink.

The crash -- China's worst rail accident since 2008 -- triggered a flood of criticism of the railways ministry and sparked accusations that the government had compromised safety in its rush to develop.

Even China's official media weighed in, with the People's Daily newspaper -- the Communist Party mouthpiece -- saying the country did not need "blood-soaked GDP".

"We feel deep guilt and sorrow about the tragic losses of life and property in the accident," railways minister Sheng Guangzu said in the statement, issued after a cabinet meeting led by Premier Wen Jiabao.

The crash has forced the Chinese government to make significant changes to its high-speed network.

The railways ministry announced on Thursday that trains designed to run at a maximum speed of 250 kilometres (155 miles) per hour would instead be limited to 200 kph, impacting ticket prices and the timetable for the network.

Shanghai railway station said in a posting on microblogging site Weibo that ticket sales for high-speed trains leaving from the city after Monday had been temporarily suspended, pending adjustments to the timetable.

In a bid to address public demands for a transparent probe into the crash, the cabinet announced it had added more academics and officials from different government agencies to an investigative team.

Peng Kaiyu, a vice railway minister, and Chen Lanhua, head of the ministry's work safety department, were also removed from the inquiry after members of the public demanded they not be included, according to a separate statement.

The crash has also cast a cloud over Beijing's nascent high-speed rail exports, with analysts worrying existing trade may take a hit over concerns about the safety of Chinese technology, which is based on Western expertise.

On Wednesday, bullet train manufacturer China CNR Corp was told to stop shipments after a series of delays on a new, flagship high-speed rail link between Beijing and Shanghai.

China's railway ministry ordered the halt after problems with high-speed trains manufactured by a unit of the listed company.

China has the world's biggest high-speed rail network. It reached 8,358 kilometres at the end of 2010, and authorities had planned for it to exceed 13,000 kilometres by 2012 and 16,000 kilometres by 2020.

In December 2010, the railways ministry announced that a Chinese high-speed train had reached a speed of 486 kilometres per hour, smashing the world record for an unmodified train.

But earlier this year, cracks started to emerge.

Authorities decided to limit speeds on the high-speed network to 300 kph, following allegations of widespread, high-level corruption in the rail sector, with fears that safety had been compromised.

Then railways minister Liu Zhijun was sacked in February over graft charges, after he allegedly took more than 800 million yuan ($125 million) in kickbacks over several years on contracts linked to the high-speed network.

China's state auditor in March said construction companies and individuals last year siphoned off 187 million yuan in funds meant for the Beijing-Shanghai link.

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