Sanlu Group, the dairy firm first found to be selling melamine-contaminated goods, began receiving complaints of sick children as early as last December, state television said, citing a cabinet probe.

It also said Communist officials in the northern city of Shijiazhuang, where Sanlu is based, delayed referring the matter to higher authorities for more than a month after Sanlu finally told them of the problem on August 2.

"In the eight months from December 2007 to August 2, 2008, Sanlu made no report to relevant authorities in Shijiazhuang and took no corrective measures, allowing the situation to worsen further," the report on state-run CCTV's news channel said, quoting the cabinet probe.

The report appeared to be the first official admission that news of the health risks was deliberately suppressed.

Reports of tainted milk only emerged in state-run media earlier this month.

The chemical melamine, normally used in making plastics, was apparently added to milk supplies to give the appearance of higher protein levels.

Sanlu Group did not begin testing its milk for dangerous substances until June, the cabinet probe reportedly found.

The government has blamed tainted products for four deaths, and said Tuesday that nearly 13,000 children had been hospitalised with kidney stones or other problems, 104 of them in serious condition.

With several countries slapping bans on Chinese dairy-based products, the government announced new steps to limit the fallout from the latest safety scare to tarnish the nation's exports.

The commerce ministry ordered tighter quality checks on export goods such as food, drugs, toys and furniture products, the official Xinhua news agency said.

The agriculture ministry ordered its departments to use "severe discipline" in stepping up supervision of milk brokers blamed for adding the chemical.

"Departments at all levels must... put these milk collectors in order and strengthen supervision. The mission must be completed to the letter," Minister Sun Zhengcai said in comments posted on the ministry's website.

Meanwhile, Hong Kong authorities reported Tuesday two more children have fallen ill in the city with kidney stones after drinking Chinese dairy products, taking the sick total there to four.

A dozen Asian and African countries have either barred Chinese milk products or taken some other form of action to curb consumption.

"What we are telling parents now, especially the mothers, is to avoid buying milk with 'made in China' markings," said Leticia Gutierrez, the head of the Bureau of Food and Drugs in the Philippines.

She spoke after announcing a ban on the import and sale of Chinese milk products.

Malaysia on Tuesday widened an earlier ban to include candies, chocolates and all Chinese-made food containing milk, a top official said.

Vietnam and Bangladesh also took new measures to ban imports of Chinese dairy products and warn consumers against using such products still on store shelves.

In Japan, a petition by the country's regional governors urged the central government to suspend imports of all Chinese dairy products, saying "people's distrust is growing over food made in China."

The scandal forced the resignation Monday of China's product-safety watchdog chief, Li Changjiang, whose tenure coincided with a wave of recent safety scandals involving food, drugs, toys and other goods, many of them exported.

Also sacked was Wu Xianguo, the top Communist official in Shijiazhuang. The city's mayor and several other government officials had been fired earlier.

Eighteen people have been arrested so far, including the sacked head of Sanlu Group, and dozens detained for questioning, according to state media.

Although Sanlu was the first company embroiled in the scandal, subsequent government tests found melamine in the products of 22 other Chinese dairy manufacturers.

Investors on Tuesday punished the shares of top Chinese dairy makers that were implicated, with Mengniu Dairy falling more than 60 percent in trading on the Hong Kong stock exchange.

In Shanghai, shares of Yili Industrial and Guangming Dairy and Food plunged the maximum 10 percent trading limit.

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