Ministry of Agriculture officials have secretly met manufacturers to get them to trace the source of the chemicals, which in animal tests have been found to shrink testes and disrupt female reproductive systems. The makers' trade association says it is "very concerned".
The chemicals, phthalates - widely used to soften plastics, especially PVC - are one of the groups of substances at the heart of scientific anxiety about rapidly falling human sperm counts, female infertility and cancer, and about weird developments such as the feminisation of male gulls, fish and other wildlife.
Ministry of Agriculture scientists have found phthalates in every sample they have tested from nine leading brands of baby formula milk, and from mixtures of six other brands. The levels of the chemicals found in the milk are worryingly close to those discovered, in experiments, to reduce the size of testes and cut sperm counts in rats.
The scientists estimate that new-born babies, fed on the milk, would receive on average 0.13 milligrams of phthalates each day for every kilogram of their body weight. This is above the lowest level at which just one of the phthalates in the milk was found to damage the testicles of baby rats in experiments carried out by the Medical Research Council last year.
The results are not strictly comparable because the rats were exposed to just one phthalate - the only one so far to be tested at low levels on animals - while babies are receiving several different phthalates in the milk at once. Some of these may not be as harmful as the one that damaged the rats, although others have also been shown to affect reproduction at high doses.
Whatever the true level of danger, it is very much higher than that normally allowed for toxic substances, which are usually not permitted to exceed 100th of the doses found to damage animals in laboratory experiments.
Professor John Sumpter of Brunel University, an international expert on the effects of "gender-bending" chemicals, says there is "cause for concern" for babies as a result of the narrowing of the safety margin.
Gwynne Lyons, scientific adviser to the World Wide Fund for Nature and a member of a government round-table investigating the chemicals, says: "Offspring are being put at risk from chemicals that are inadequately tested and inadequately controlled."
Publicly, the Ministry of Agriculture seeks to play down the danger from the chemicals, saying that levels in the baby milk are below official Tolerable Daily Intakes (TDIs). But it admits that these TDIs were set before evidence was found of the chemicals' potential effects.
Privately, officials have met the Infant and Dietetic Foods Association, representing the manufacturers, to get them to identify the source of the contamination. The association, while insisting that the ministry had said the levels were "not likely to be dangerous", says it is "very concerned" and "will seek to reduce all levels of phthalates in baby foods".
But neither the association nor the ministry will reveal the names of the brands tested or the levels of the chemicals found in them. The association says the information is "commercially sensitive".