WASHINGTON (Reuters) - An unregulated chemical used in furniture, carpet and Teflon could be a serious health risk to the public, prompting the Environmental Protection Agency on Monday to launch an in-depth assessment to determine its safety.

Most of the U.S. population is exposed to low levels of the chemical C8, or perfluorooctanoic acid, according to the EPA. The chemical is used in hundreds of consumer and industrial products such as jackets, to keep them dry, and as an ingredient in Teflon to prevent food from sticking to pots and pans.

The EPA announced that it "intensified and accelerated" its review of C8, based on studies recently evaluated by the agency which raised toxicity concerns.

As part of its review, the EPA ordered the industry to submit new data to the agency by mid-July.

EPA scientists plan to determine all potential sources of C8, how the public is exposed to it and if high levels pose a threat to human health as some animal studies have suggested.

"To ensure consumers are protected from any potential risks, the agency will be conducting its most extensive scientific assessment ever undertaken on this type of chemical," Stephen Johnson, an assistant EPA administrator, told reporters.

"The agency is concerned, but that concern is tempered in that there is a lot of uncertainty associated with the information we have," he said.

The EPA said it was premature to ban or recall products containing C8 until more studies are completed.

"EPA has not determined whether (C8) poses an unreasonable risk to the public," Johnson said. "Thus EPA does not believe there is any reason for consumers to stop using any consumer or industrial related products."

The EPA last September began a priority review of C8 under the Toxic Chemicals Control Act, which can be used to ban chemicals that lead to health problems or defects.

C8 can remain in humans for up to 4 years, according to the EPA. Small amounts of the chemical are found in a large proportion of the general U.S. public.

Last week, the Environmental Working Group, an advocacy organization, alleged that DuPont Co. withheld from the government an internal study linking C8 to birth defects in two of seven children born to DuPont employees in the early 1980s.

"(For the EPA) to get to this point and put this huge, economically incredibly valuable product ... into this kind of a review is a very big deal," said Richard Wiles, a vice president of the advocacy group.

DuPont, which uses C8 to make Teflon, said it would work with the EPA. The company maintains that low-level exposure to C8 does not cause developmental or reproductive harm.

"We share the EPA desire to safeguard human health and the environment, and respect the position that there are still questions to be addressed," said Richard Angiullo, a DuPont vice president. "A well-informed regulation would help assure society is not being exposed to undue health or the environmental risk."

DuPont said it recorded some employees' low-level exposure but did not conduct a formal study evaluating C8 or its effect on human health. Federal law requires companies to report information when the public is at risk to high levels of C8.

DuPont said its records showed one birth defect, but added there was "no indication" it was linked to exposure to C8.

The Teflon chemical C8 is part of a broader family called perfluorochemicals.

Tests by 3M Corp., the original manufacturer of C8, and others have shown that high levels of exposure to the chemical may cause liver damage and reproductive problems in rats.

Additional studies have suggested that C8 can lead to birth defects in children of employees where the product is made.

In 2000, 3M pulled its stain repellent Scotchgard from the market after the EPA expressed concern that a sister chemical to C8 posed serious health risks. 3M has since stopped making all C8-related chemicals.