The factory blamed for the lead poisoning of more than 300 children is refusing to take responsibility for the incident in Shaanxi province.
The children, who all live near the Dongling Lead and Zinc Smelting Factory in Changqing industrial park in Fengxiang county, were found to have excessive lead content in their blood last week.
But factory officials said the local government's slow relocation of those villagers caused their ill health.
The local government allegedly promised the factory owners it would relocate 581 nearby households when it invited the company to settle at the industrial park in 2003.
But the relocation has been slow due to lack of funds, and only about one third have been moved.
"The local government should take care of the victims," the director of the factory's administrative office, who only gave his surname Mao, told China Daily yesterday.
"The agreement between the government and our factory says the government took responsibility for the relocation work when our project started in 2003."
The government moved about 200 households in 2005 and 2006 as scheduled, but the relocation process was stopped in 2006, leaving about 400 households where they were, the director said.
"So it's the government's fault not having moved away all the nearby households," Mao said.
He said that the county government is planning to build several five-story residential buildings in another location for the remainder of the families.
Local government officials could not be reached for comment yesterday.
Factory officials said it passed the evaluation by the Shaanxi Province Northwest Environmental Evaluation Center in 2004 and their facilities are qualified for production.
But lead and zinc smelting factories are not allowed to be in operation until there are no residents living within one km.
When the factory started running in 2005, more than 400 families still lived within an diameter of one km.
"The factory started the production process before all the nearby residents had been moved away," said Ma Shengqin, whose children have been poisoned by lead.
"So the factory has to help relocate us."