Dell knew of a potential problem with exploding laptop batteries even before online pictures of one of its machine bursting into flames in Japan led it to recall more than four million of the faulty components.

A source close to the manufacturer told Times Online that the company had been investigating whether the overheating batteries were a "one-off" problem before June 21.

Dell eventually recalled the lithium-ion batteries last night after pictures were circulated over the internet of one of its laptops exploding at a conference in Japan.

The recall is the biggest in the history of the consumer electronics industry, The Times reported this morning.

For details on affected Dell models and how to exchange batteries click here.

In a statement released today, Dell said: "Under rare conditions, it is possible for these batteries to overheat, which could cause a risk of fire."

It added it has received six reports of overheating computers causing "property damage to furniture and personal effects". A spokesperson said the company does not know how many of the faulty machines are in the UK.

The Inquirer, a technology website, reported the Japan explosion in more colourful terms, quoting an e-mail from a reader who claimed to have witnessed the event.

"The damn thing was on fire and produced several explosions for more than five minutes," he said in the June 21 report.

The site added: "Should you witness such an event, his advice is, 'Don't try anything courageous/stupid, stay away, away, away! ... Fire extinguishers leave a mess on your suit and belongings; pack your stuff (if you can) and leave, leave, leave!".

A spokesperson for Dell told Times Online: "Yes, it is a Dell laptop featured in the picture on The Enquirer."

It is unclear what caused the Dell explosion. But experts fear that new battery technologies are susceptible to "thermal runaway" – which means once a faulty battery hits a certain temperature, which differs between models, it continues becoming hotter by itself. The process can lead to explosions.

News of the recall led to criticism from bloggers. Josh Hill, a blogger who used to be a computer technician, wrote: "I cannot fathom how it is [computer companies] had not discovered in testing each batch of batteries - that there was a problem.

"And if there wasn’t testing done of each batch of batteries, no matter how tedious it may be, then there’s half your problem."

The batteries were made by Sony and were installed in machines sold between April and July this year.

The same components were used by companies including Hewlett-Packard, Toshiba, Lenovo and Apple.

A Sony spokesman in Tokyo told Reuters that the overheating problem was believed to be specific to batteries supplied to Dell, but recall decisions are up to each PC maker.

Apple said: "We are currently investigating whether batteries that have been supplied to Apple for our current and previous notebook lines meet our high standards for battery safety and performance."

Hewlett-Packard and Lenovo said they had no plans for a recall.

Analysts have estimated the recall could cost more than $300 million and expect at least a portion of the cost to be shouldered by Dell.

The company said today: "Dell does not expect this recall to have a material adverse effect on its results of operations, financial position or cash flows."

Shares in Dell were up nearly 3 per cent in New York on a positive broader market . Sony closed down 0.38 per cent in Tokyo, slightly underperforming the overall market.

Dell has taken a beating on Wall Street over the past year, with its shares falling by nearly half. In contrast its closest rival Hewlett-Packard has surged 37 per cent.

Chairman Michael Dell told reporters in Singapore: "We have confidence that they have taken the right countermeasures and the process is now secure. We expect that Sony will continue to be a good supplier of batteries for us."

It is not the first time Dell has been forced to act in response to the growing trend towards "online activism".

Jeff Jarvis, the popular technology blogger last year launched a one-man campaign against the corporation, after his efforts to fix a $1,600 PC that overheated ran into lengthy delays.

His series of attacks on Dell included an open letter to then chief executive Michael Dell that said: "The bottom line is that a low-price coupon may have gotten me to buy a Dell, but your product was a lemon, and your customer service was appalling."

The PC manufacturer was also hit by a University of Michigan study that showed a large decline in customer satisfaction.

Lithium-ion batteries are lighter than their nickel metal hydride predecessors because they enable more power to be packed into a smaller space.

However, many of the batteries use cobalt oxide, which experts say can undergo "thermal runaway" - a process where once it reaches a certain temperature it begins to self heat, possibly until it catches fire.

Such overheating could damage computer processors, which have a maximum safe internal operating temperature, set by chipmakers.

Intel, the largest chipmaker, defines "typical office room" temperature as 22C (71.6F). Major manufacturers generally regard 35C as the maximum ambient operating temperature.

Anyone working in hotter conditions should keep tabs on the temperatures inside their machines, experts advise.

Times Recommends

• Brown targets fat cats after nationalising banks
• US shares soar on global banking rescue
• Europe follows Brown to head off meltdown