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CHINA is on the hunt for 98t of tainted milk powder after it emerged a dairy had accepted it as payment for a debt – and then reprocessed it into its own products and sold it on.

The evidence has emerged as China comes to the close of its ten day national crackdown on melamine-tainted milk products. Nitrogen-rich melamine, used in fertilisers and plastics, is added to milk to fool quality tests into indicating it is rich in protein. Melamine is not suitable for consumption – it causes kidney stones and kidney failure.

China Daily newspaper reports the tainted powder is from the same batch that killed six children and left hundreds of thousands ill in 2008. It should have been destroyed but it now turns out that an unnamed company gave 170 t of the product to Ningxia Tiantian dairy to settle a debt.

The dairy reused the powder and sold its products to factories in Fujian and Guangdong Provinces, and Inner Mongolia. Authorities have only recovered 72 t of tainted product with the rest believed to still be in circulation.

Zhao Suming, secretary general of Ningxia Dairy Industry Association moved to defend the affected dairy: “As a small company, the Tiantian dairy company doesn't have a machine to test melamine. Such a machine can cost up to 1 million yuan ($147,000). So many companies are just not able to check if the milk powder they buy is safe or not.”

The news casts further doubt on the Chinese food and drink sector. Authorities told dairies to destroy tainted products after the 2008 scandal. This latest event is the third in the last three months to show that order was not followed.

China Daily quotes Zhao as asking if the same could happen again. “Flaws in the previous system led to the current chaos,” he says. “What if companies with tainted milk also hold back their stocks for this round of checkups and reuse them later, just like what's happening now?”