The government announced the national figures two days after 59 babies in one province alone were reported to be suffering from kidney stones as a result of consuming the milk powder. At least one child has died.
After health departments nationwide were ordered on Friday to report all cases of babies suffering kidney stones from drinking Sanlu brand milk powder, 25 cases were reported in Beijing and another 22 in Shanghai.
The health ministry said that an initial investigation had found that the state-owned Sanlu Group knew the milk powder was contaminated in August, but did not release the information until after reports of sick babies emerged this week.
"Those responsible for the contaminated milk will face severe punishment," the ministry said.
Chinese state media has condemned Sanlu, with the China Daily newspaper on Saturday, calling the behaviour of the company "appalling".
The newspaper also sharply criticised government inspectors who it said had become aware of a possible problem as early as June.
The state-run Xinhua news agency said more sick babies may still be reported in at least five other provinces and regions.
Another 35 cases have been cited in central Hunan province, while 13 came to light in neighbouring Hubei, provincial health bureaus and state media reports said, as the latest scandal to rock China's food industry deepened.
The health ministry called for more inspections of all baby milk powder in China and issued guidelines on how to treat infants suffering from kidney stones.
Investigators said Sanlu knew the milk powder was contaminated in August [AFP]
Shops across China including global retailing giants Wal-Mart and Carrefour pulled the milk powder from shelves Friday after a recall was issued.
The affair has had repercussions overseas, with the US Food and Drug Administration reportedly alerting US markets to beware of Chinese-made baby formula.
The World Health Organisation said it was monitoring the situation and providing "technical assistance" to the Chinese authorities in their probe, although it was not clear if any of the contaminated powder has been exported.
Taiwanese authorities on Saturday seized nearly 10 tonnes of milk powder imported from China, mainly of the Sanlu brand.
Media reports said dairy farmers were suspected of lacing milk used in the Sanlu brand formula with melamine to boost its protein content.
Melamine, a chemical used in making plastics, glues and other products, was at the centre of a US recall of pet foods containing Chinese-made additives last year.
China has in recent years endured a series of high-profile safety scandals over its food and other products sold overseas, as well as domestically.
Xinhua said 78 "suspects" had been summoned for questioning in the latest case by police in Shijiazhuang, a city near Beijing where Sanlu is based.
They include dairy farmers and milk dealers, it reported.
The company's public relations office did not answer phone calls on Saturday, while no apologies were posted on its website on Saturday.
In 2004, 13 infants in eastern China's Anhui province died of nutritional deficiencies after being fed sub-standard milk powder and over 170 infants fell sick in what the Chinese press said involved pirated Sanlu products.