Shao Wenting, 15 months old, is suffering from kidney stones after drinking Sanlu milk powder. (Associated Press)

The head of China's food safety watchdog resigned Monday amid a scandal over tainted baby formula that made nearly 53,000 infants fall ill, state media reported.

The official Xinhua News Agency said Li Changjiang stepped down with the approval of China's cabinet.

Li's agency is responsible for ensuring that China's food supply chain is safe. His resignation comes after the industrial chemical melamine was blamed for causing kidney stones and kidney failure in babies.

The chemical was found in infant formula and other milk products from 22 of China's dairy companies.

Xinhua said Wang Yong had replaced Li as the director of the General Administration of Quality Supervision, Inspection and Quarantine.

Although Xinhua said only that Li had resigned after infants had become sick after consuming tainted milk products, the widespread nature of the crisis reflects a systemic breakdown in supervision of the dairy industry.

Infant formula and other milk products have been pulled from stores around the country and Chinese imports from liquid milk to instant coffee mix to milk-based candy have been banned around Asia.

On Monday the World Health Organization demanded stricter monitoring of the industry.

Sanlu Group Co., the dairy at the centre of the scandal, and several other leading companies found to have tainted milk had been given inspection-free status by China's product quality watchdog.

That privilege has since been rescinded, but WHO China representative Hans Troedsson stressed it was only a first step and that quality issues can crop up at any point in the supply chain, from the farm to the retail outlet.

"It's clearly something that is not acceptable and needs to be rectified and corrected," he said.

The official number of sick children jumped late Sunday from 6,200 to nearly 53,000.

More than 80 per cent of the 12,892 children hospitalized in recent weeks were two years old or younger, the Health Ministry said. Of those in hospitals, 104 are in serious condition.

Another 39,965 children received outpatient treatment at hospitals and were considered "basically recovered," the ministry said.

Four babies' deaths have been blamed on tainted milk powder.

The ministry did not explain the sudden increase in the number of cases, but it suggested health officials were combing through hospital records from May through August to trace the origins of the contamination. The deaths of three infants linked to tainted infant formula occurred in those months, the Health Ministry said.

The WHO was having discussions with Chinese officials on how to strengthen its food quality system, Troedsson said. Local authorities need increased training to create a "more robust reporting system," he said.

"It is important to know if information was withheld, where and why it was withheld," he said. "Was it ignorance by provincial authorities or was it that they neglected to report it? Because if it was ignorance there is a need to have much better training and education … if it is neglect then it is of course more serious."

Investigators say some raw milk suppliers, in hopes of clearing more profit, may have watered down their milk to increase volume and then added melamine, which is high in nitrogen and artificially appears to boost protein content.

Serious food and product safety scandals have been a feature of Chinese life. The country's image took a beating last year when exports of medicines, toys, pet food ingredients and other products killed and sickened people and animals in North and South America.

The chemical in the dangerous pet food was the same as in the milk scandal — melamine.

At the time, the government promised to overhaul inspection procedures and crack down on companies that took shortcuts.