A third baby has died and the number sickened after being fed milk powder laced with an industrial chemical has soared five-fold to more than 6,000 in one of the worst food quality scandals to rock China.

The Health Minister Chen Zhu said: “As far as possible, minimise the harm to infants’ health from the contaminated milk powder.”

Hospitals were crowded with anxious parents seeking the free treatment promised by the government for their babies.Supermarket workers in many cities raced to pull tins of formula off shelves in a huge recall and amid fears the numbers of infants ill after drinking powdered milk adulterated with the compound melamine could rise. Minister Chen said more and more parents were expected to take their children to hospitals in the coming days.

The Government has announced that a fifth of 109 dairy manufacturers that have been checked had produced batches of milk products adulterated with melamine, used in plastics and fertilisers banned from foods. But the compound is rich in nitrogen, used to measure protein, and can be used to disguise milk that fails to meet standards or has been diluted.

Minister Chen revealed today that the number of affected infants had rised to 6,244, of whom 158 were found to have acute kidney failure. Melamine can cause kidney stones and other organ problems and three babies have so far died.

Two of the ills of China’s system, greed fuelled by decades of want and secrecy fed by a system that lacks proper checks and balances, are to blame for the tragedy. The scam by which it appears milk collecting stations mixed melamine into milk to ensure they could sell it to Sanlu Group – China’s premier baby milk brand – came to light months after the producer was first alerted to the problem.

Yang Chongyong, a vice governor of northern Hebei province where Sanlu is based, said officials in the provincial capital had delayed reporting the poisonings throughout August – just as Beijing’s international image was on the line amid the Olympic Games.

Mr Yang said: “It should be said that the Shijiazhuang government did not announce to society in a timely way this major food safety incident. They have a major responsibility.” But Sanlu had covered up the adulteration since at least early August.

The chairwoman of Sanlu, a Communist Party official, has been fired and arrested. The mayor of the provincial capital has been sacked. Aware of rising popular anger, the propaganda authorities appear to have given the go-ahead to publicising the escalating scandal by broadcasting a directive from Premier Wen Jiabao on the evening television news.

Among the other offending companies are Beijing Olympics sponsor Inner Mongolia Yili Industrial Group and China’s biggest dairy producer, Mengniu Dairy, which plans to recall "unfit" products.

The scare has rippled beyond China’s borders with the top quality watchdog saying two manufacturers were recalling milk powder exported to Yemen, Bangladesh, Myanmar, Gabon and Burundi. It was not clear whether those exports were contaminated. Hong Kong food inspectors ordered the recall of an ice cream bar made by Shanghai Yili AB foods because melamine had been found.

Li Zhiqi, a Beijing-based consultant with dairy companies, said: “China’s dairy industry has been pushed to the brink of outright crisis.”

In the poor northwestern province of Gansu, where the scandal broke, some parents were turning to goat’s milk. Qi Yunzhong, a schoolteacher, told AFP: “For smaller kids, families are finding ways to get them goat’s milk. The bigger kids are just eating rice.” His own two-year-old son had been diagnosed with a kidney stone but was expected to recover.

The escalating scandal is an embarrassing failure for China’s product safety system, overhauled last year to restore consumer confidence and preserve exports markets after a string of warnings and recalls involving tainted toothpaste, faulty tyres and pet food laced with melamine.

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