A new fund will also come into effect in January to pay for medical treatment and operations for diseases caused by the tainted milk. The firms will pay out more than 900 million yuan in cash and set up a 200-million-yuan medical fund to cover bills for any lingering health problems. “If the babies suffer from relevant after effects, all medical fees will be covered by the fund,” the China Dairy Industry Association said.

The payout could be more than 13.5 billion yuan.

The association did not name all 22 companies, but 22 is the same number of manufacturers involved in the scandal, including the Sanlu Group which filed for bankruptcy before a court last week.

Numerous lawsuits demanding compensation for victims of the scandal have so far been rejected by mainland courts, some of which urged victims’ families to wait to see what the government decides.

For some experts Beijing wants to avoid bad publicity and setting a dangerous precedent with higher compensation payments decided by the courts.

The scandal highlighted in fact the responsibilities of local government officials. For instance, Shijiazhuang’s deputy mayor, Zhao Xinchao, was sacked yesterday. The Sanlu Group is the city's top dairy enterprise.

Two members of Shijiazhuang's municipal party standing committee, Jiang Hongjiang and Zhang Shuzhi were also removed. Mr Jiang was responsible for food and work safety in the city.

In September, seven other municipal officials were sacked in an attempt to calm public anger over the milk scandal.

In the meantime in the trial against Sanlu, which opened on Saturday, four more people have been charged, joining six company officials and suppliers now on trial (pictured, two of the accused).