The draft law before the National People's Congress aims to prevent any cover-ups by health authorities and would make them directly responsible for approving additives in processed foods, Xinhua news agency reported.

It would also prevent food safety authorities from issuing inspection exemptions to major food producers, as happened in the milk scandal -- the most recent of many health scares to hit Chinese-made goods in recent years.

The scandal broke last month, when it emerged that melamine, an industrial chemical normally used to make plastics and glues, had been added to baby milk formula and other dairy products to make them appear richer in protein.

Although at least one Chinese dairy firm knew of the scam for months, it did not immediately report it to local government officials, who in turn delayed passing on the news for nearly a month until after the August Beijing Olympics.

The draft law would require health authorities to immediately conduct investigations as soon as they receive consumer complaints, Xinhua said.

It acknowledged consumers began complaining about milk products in March of this year, but local health departments failed to respond until September.

"No organisations, institutions or individuals should cover up, lie about or delay reporting food safety incidents. Destroying evidence is strictly forbidden," it cited the draft law as saying.

It was not immediately clear if the parliament, which is widely seen as a rubber stamp for ruling Communist Party, would pass the draft law during its ongoing session, which ends on October 28.

The health ministry, meanwhile, said that 3,654 infants were still in hospital as a result of the contamination -- three of them in serious conditions.

A further 46,700 others had recovered and been released from clinics as of Wednesday, the health ministry said in a short statement.

The ministry did not report any new fatalities, but said that the four infant deaths so far attributed to drinking contaminated milk all occurred between May and August before the scandal was made public.

The government had previously reported that more than 53,000 children had fallen ill after drinking tainted milk, with many of them suffering kidney stones.

In the former Portuguese enclave of Macau, three more children were found to be ill after drinking milk tainted with melamine, taking the total number of affected children there to seven.

The scandal has hit China's dairy industry hard, and continues to escalate around the world as multinationals and countries recall Chinese milk products.

In another development on Thursday, six people were arrested in northern China for allegedly mixing melamine and milk products, Xinhua said.

The six were all arrested in Inner Mongolia on suspicion of putting the industrial chemical melamine into milk products destined for the factories of major dairy producer Mengniu, it said.

At least 36 people have so far been arrested for their alleged involvement in the scam in Hebei province, which lies just south of Inner Mongolia and is another major dairy region, it added.

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