The blatant activity in July last year followed another complaint two years earlier that a live rabbit had been taken to the Wentworth Park race track in Glebe and put into a catching pen where it was killed by two greyhounds after they had finished trials.

Greyhound industry sources were angry that the first trainer was fined just $400 with $200 suspended, because no live animals were found on his property and there was no evidence he had bought any animals. Greyhound Racing NSW (GRNSW) confirmed the trainer was the only person interviewed in the investigation.

The second trainer had argued that the rabbit was already dead when it was "tethered and placed in the box as a normal educational practice for the greyhounds". He was found to have no case to answer by GRNSW but was told to brush up on rules regarding lures at race tracks.

The complaints were made before and during a parliamentary inquiry into the multimillion-dollar industry which was also told details of the use of guinea pigs, rabbits, chickens, kittens and possums which have had their claws and teeth removed so they can't hurt the dogs, being used as "bait" and being mauled to death in training sessions.

Fairfax Media has run a series of stories exposing problems in the industry and there has been a widening public outcry after an investigation by Animals Australia and Four Corners screened covert surveillance on Monday night revealing that live baiting was going on openly in at least three states and involved some of the biggest names in greyhound racing.

Following raids by the RSPCA and police in the past two weeks, more than 30 people have been suspended from the industry across the country. Ten have suspended in NSW and six others are under investigation.

The Minister for Racing,Troy Grant, took action after seeing the footage and forced the board of GRNSW and the chief executive  to step down. He has appointed an interim chief executive, Paul Newson, to oversee the industry while an investigation by former High Court judge Michael McHugh is completed.

Greyhound industry participants, while horrified at the revelations about live baiting, told Fairfax Media the scandal may end up being the "saviour" of the industry which they believe is  riddled with nepotism, cronyism and mismanagement of funds and assets.

Industry sources have said they have been penalised and targeted for speaking out and blame the management, saying the culture is wrong. Some have complained that industry funds are being used to prop up bad investments, while prizemoney for participants has been allowed to dwindle.

"The whole structure of GRNSW needs to be looked at and also how they deal with corruption," said one industry veteran.

Corrupt practices had sparked a 2000 inquiry into the sport by the Independent Commission Against Corruption and GRNSW was set up as an autonomous non-government body – not subject to direction by the government or oversight by the ICAC.  Industry figures argue it hasn't worked.