More than 200 Chinese parents whose babies were sickened or killed by tainted milk plan to reject a government compensation scheme because it is limited and does not cover enough children, an organizer of the families said Tuesday.

Zhao Lianhai said parents in several provinces and big cities around the country are gathering signatures rejecting the compensation issue, with more than 200 amassed since an appeal letter was posted on the group's website Saturday. The invitation for signatures closes Thursday, he said.

"Many parents have called me saying they would not accept the government's compensation plan," Zhao said in a telephone interview. The government's plan calls for families whose children died to receive 200,000 yuan ($29,000 US), while others would receive 30,000 yuan ($4,380 US) for serious cases of kidney stones and 2,000 yuan ($290 US) for less severe cases.

The letter marks the latest confrontation between affected families and the government over the scandal, which is widely seen as a national disgrace.

The case has worried the government, which has offered payouts to defuse public anger that it fears could spark larger unrest. Zhao was detained by Beijing police on Jan. 1, apparently to prevent him and other parents from holding a news conference to complain that the proposed compensation scheme is too low. He and four other parents were released after a day.

The letter, seen by The Associated Press, says compensation should be based on appraisals of individual cases and not only according to broad categories.

Other demands include free medical treatment for babies still recovering, and the lifting of an age limit of three for children eligible for free treatment.

Many parents feel the government breached their trust in certifying milk powder as safe that later led to the illness or death.

The Health Ministry says 296,000 babies were sickened with kidney stones and other problems after consuming milk powder tainted with the industrial chemical melamine. Six deaths have also been linked to the contamination.

Zhao, whose three-year-old son fell ill but has since recovered, said parents have been holding weekly meetings with lawyers in Beijing to discuss the compensation issue. They drew up the seven-point appeal letter to submit to the Health Ministry, China's Dairy Industry Association and the official China Consumers' Association.

"As consumers, we suffered great injury, and the expenses and all the losses incurred in the process of getting treatment for our sick children should be paid for by the manufacturing companies," said the letter, which has been signed by parents across the country, stretching from the southern province of Guangdong to Heilongjiang in the northeast and in cities like Beijing and Shanghai.

Three of the signatories are parents whose children died from tainted milk, Zhao said, but it was not clear if their babies are included in the official death toll.

Normally used to make plastics and fertilizer, melamine can cause kidney stones and kidney failure when ingested in large amounts. The discovery of melamine in dairy exports such as chocolate and yogurt triggered a slew of product recalls overseas.

The former boss of a dairy at the centre of the scandal faces possible execution after pleading guilty to producing and selling fake or substandard products.

Tian Wenhua, former board chairwoman and general manager of Sanlu Group Co., said in court testimony Dec. 31 that she knew of problems with her company's products for months before informing authorities. No verdict has been announced.