The North Woolwich Children's Centre, near London City Airport, closed last December after staff went down with a mystery illness. The eight nursery workers are still off sick and the building remains empty.
An investigation by Newham council failed to isolate any toxic material on the premises. But reports of similar symptoms by nearby residents has prompted a new investigation by the London Hazard Centre, a health and safety unit funded by local authorities.
Nursery staff believe toxic material may have been disturbed during the site's development. Soon after they began working at the centre in August last year they started to get severe headaches, felt they had flu and suffered constant tiredness, severe stomach pains and diarrhoea.
In severe cases, clumps of hair fell out, itchy blisters appeared on the skin and scalp. Parts of the inside of the mouth turned blue.
Although most of the symptoms have abated since they stopped work, staff still complain of diarrhoea, tiredness and violent headaches. Some of the black workers have developed white freckles and say their skin turned paler. The centre manager, Marissa Bagalo, lost clumps of hair and although most has grown back, there are visible thin patches.
She said: 'I started there on 8 August. The next morning I woke up with pains in my chest and I got skin irritations. When the heating went on the symptoms escalated. Lumps would appear under your skin and your blood would feel like you were boiling. Mouth ulcers would appear by mid week, although they would clear up at the weekend.'
Tests by Newham council have revealed high levels of white spirit in the nursery, which was purpose built with a pounds 800,000 grant from the London Docklands Development Corporation.
The council says any other substances found on the site are well within World Health Organisation limits, although a new ventilation system has been installed and further tests are being made. The council says there is no history of an industrial site in the area and no evidence of soil problems.
It also says none of the children who attended the nursery during the two-week period in December when it was open suffered symptoms.
Hugh MacGrillen, advice worker at the London Hazard Centre, blames lead in the land. 'The area has been industrialised for 180 years. We figure all kinds of things have been dumped there over the years.
'There is no doubt whatsoever they were ill . . . the symptoms they described were similar to those related to heavy metal poisoning. White spirit might have caused nausea or dizziness but it wouldn't have caused the other things.'
He supports claims by the workers' union, Unison, that the whole thing has been mismanaged by Newham council. 'If they had gone in and done a proper survey at the outset it would have sorted things out.'
It has emerged that some people living near by have similar symptoms. Mick Preston, who lives next door to the centre, complained of feeling constantly tired, of losing hairs on his legs and head, and having epileptic fits for the first time.
It was only after he attended a meeting held by social services director Deborah Cameron that he discovered nursery staff had similar symptoms. 'I had no reason to associate anything with the nursery. I had a funny taste in my mouth and a dry cough, dizzy spells and fits.'
Phil Thompson, chair of Newham Unison, agrees the council should have acted more quickly. 'They should not gamble with staff and children's lives. This was very much a high-profile project which had taken two or three years to get off the ground. The last thing they wanted was to admit something was wrong.'
The LDDC is putting pressure on the council to reopen the nursery - or start paying back some of the grant.