Tainted milk formula has killed one baby and caused the development of kidney stones in dozens of others who may have drunk the same product, Chinese authorities concluded on Thursday, in a grim reminder of a milk-powder scandal that killed 13 infants four years ago.

Traces of cyanuramide, which can cause kidney stones, were found in Sanlu-brand milk formula, the Ministry of Health said late on Thursday. The Sanlu Group issued an immediate recall of milk formula made before Aug 6.

Doctors in Gansu Province, in northwestern China, told the Xinhua news agency this week that 'fake milk powder' from one brand could have been responsible for kidney stones developing in 14 patients, all infants under 11 months.

Parents of the affected babies, mostly from poor and remote areas, said they had bought the powder much more cheaply than usual, Xinhua said.

Gansu health authorities were aware of the problem as early as July 16, after a local hospital reported seeing 16 babies with kidney stones who had all drunk the same brand of formula, Xinhua said, without explaining the delay in disclosure.

Dozens of other cases of babies developing kidney stones had been reported in Gansu this year, after none was reported in 2006 and 2007. It was unclear whether they had drunk the same brand of milk formula.

Cases of babies developing kidney stones had since emerged in two other hospitals in Gansu and also in Jiangsu, Shandong, Hunan, Anhui, Ningxia and Shaanxi, Xinhua said.

A Sanlu Group spokesman surnamed Cui said the milk powder may have been mislabelled and that 'someone' might be counterfeiting their product, Xinhua said.

Sanlu Group, based in Shijiazhuang, Hebei Province, is partly owned by New Zealand dairy export giant Fonterra Co-operative Group Ltd.

In a statement carried by the New Zealand Press Association, Fonterra said its Chinese partner was moving to ensure its products were safe. Sanlu has previously been involved in quality scandals.

Authorities in the northern port city of Tianjin seized hundreds of cases of mislabelled Sanlu-brand yoghurt in 2005.

Kidney stones are small, solid masses that form when salts or minerals normally found in urine crystallise inside the kidney. If they become large enough, they can move out of the kidney, cause infection and lead to permanent kidney damage.

In 2004, at least 13 babies in eastern Anhui province died after drinking fake milk powder that investigators later found had no nutritional value, a scandal that rocked the country and triggered widespread investigations into food and health safety.

China is the world's second-biggest market for baby milk powder.-Reuters