The number of babies who have been sickened by contaminated milk powder has doubled to more than 1,200, Chinese health officials have said.

Most of the 1,253 infants involved have developed kidney stones, Ma Xiaowei, the vice health minister, told reporters on Monday.

A second baby had also died of kidney failure after drinking Sanlu brand milk powder containing the industrial chemical melamine, the health ministry also said.

Sanlu, a Chinese company 43 per cent owned by New Zealand's dairy giant Fonterra, has said suppliers who sold the raw milk could have added the chemical in order to make its protein content appear higher.

The number of infants known to have fallen ill after drinking the milk are twice the number previously acknowledged.

Of those affected, 53 cases were serious and 340 remained in hospital, Ma said.

"Wherever cases are found, we'll bring experts and resources to bear in treating the victims," he said.

Pair arrested

Police said they had arrested two brothers, surnamed Geng, who run a milk collection centre in Hebei province and are accused of adding melamine, a compound used to produce industrial products such as plastics, glues and cleaning agents among others, the official Xinhua News Agency said.

They sold about three tons of contaminated milk a day, the report said.

Nearly 600 babies have fallen ill after drinking the contaminated milk powder [AFP]

Helen Clark said on Monday that Chinese officials only acted after the New Zealand government contacted the central government in Beijing.

"They [Fonterra] have been trying for weeks to get official recall and the local authorities in China would not do it," Clark told TVNZ.

Fonterra said it had raised the alarm more than a month ago, urging a public recall.

Clark said she was told of the problem on September 5 and three days later New Zealand officials were ordered to bypass local officials and inform the Chinese central government.

"As you can imagine, when the New Zealand government blew the whistle in Beijing a very heavy hand then descended on the local authorities," she added.

Customer complaints

Chinese authorities ordered Sanlu to halt production last week after investigators found melamine in its powder.

But Sanlu had begun receiving customer complaints as early as March that babies' urine was discoloured and that some had been admitted to hospital.

The incident is an embarrassing failure for China's product safety system, which was overhauled in an attempt to restore consumer confidence and preserve export markets following recalls and warnings abroad over tainted toothpaste, faulty tyres and other goods.

The discovery of the tainted milk is especially damaging because Sanlu is China's biggest producer of powdered milk and such large companies are expected to act as industry role models for safety and quality.

Shoddy and fake goods are common in China, and infants, hospital patients and others have been killed or injured by tainted or fake milk, medicines, liquor and other products.