"Authorities have brought down a wall of strict censorship on local coverage of the tragedy of the deadly stampede as questions mount over how such a tragedy could have occurred in China's wealthiest and best-managed city," Hong Kong-based South China Morning Post reported.
The censorship was "unprecedented and harsh" and officials were worried that they could be blamed for the stampede that killed at least 36 people, the Post report said.
The Communist Party's propaganda department in Shanghai has issued several notices to local media in the past two days, instructing them on various issues, ranging from the scale of coverage and use of photos to interview protocols, according to three senior journalists.
"It seems ridiculous that local newspapers were instructed not to use photos showing people mourning for the dead victims," it quoted a senior newspaper editor as saying.
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Many district officials and police fear that they were likely to lose their jobs over the incident.
The incident was expected to have political ramifications as Shanghai branch of the Communist Party of China (CPC) plays an influential role at the centre.
President Xi Jinping who ordered an inquiry to fix the responsibility was also the Secretary of CPC, Shanghai unit in 2007 and from there he was promoted to Vice President.
The victims were mostly students of Fudan University, East China Normal University and East China University of Political Science and Law. Forty-nine people were injured.
There are still no answers about how the stampede took place at the city's historic Bund riverfront minutes before the countdown for the New Year started.
Police admitted on Thursday that they underestimated the number of people showing up on the Bund, deploying fewer officers for the event than were needed.
Most of those killed and injured in the stampede were young people in their 20s, including college students.
As exhausted people fell or were knocked down, tripping more behind them, panic quickly spread through the huge crowds, with "young girls screaming desperately for their lives and the sounds of all sorts of curses around," wrote one eyewitness on social media.