The substance, believed to be palm oil, can be poisonous to dogs and other pets.
It was spotted on Lancing beach on Sunday, and then in Worthing this morning, with reports it has now been seen on beaches as far away as Folkestone.
Adur and Worthing Council is currently carrying out a cleaning process from Splashpoint Leisure Centre, going east.
Dog walkers are being advised to stay above the high tide mark.
A spokesman for Adur and Worthing Council said: “Dog walkers and beach users are being asked to keep away from the substance while it is being identified. The extent and nature of the spill means that the substance is likely to be washed back out to sea over the next few tide cycles.
“The Councils’ Foreshores, Environmental Health and Cleansing Teams are continually monitoring the situation, and the Councils are sharing information through their social media channels to keep the community updated.
“If it is indeed palm oil, it is not harmful to human health, but is poisonous to dogs and other creatures if swallowed.”
It is unknown how much of the substance there is, but it is believed to have leaked from a passing container ship.
People are encouraged to report further incidents to the council on 01903 239999 or to the Environment Agency via their 24 hour hotline on 0800 807060.
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