The parents of the first child who died after drinking chemically-tainted milk formula in China have been paid by Sanlu Group Co..

Yi Yongsheng and Jiao Hongfang, villagers in Gangu County of the northwest China's Gansu Province, confirmed with Xinhua on Friday that they had received 200,000 yuan (US$29,247) from the company.

Their five-month-old son died on May 1, 2008 after suffering from kidney failure caused by the contaminated milk. He was believed to be the first child who died after drinking formula containing the industrial chemical, melamine.

By accepting the money from Sanlu, Yi and Jiao had to give up their rights to sue the company.

Their lawyer, Shen Xianlei, said the couple was unlikely to get more than 200,000 yuan by taking their case to court in Gansu, where death compensation is typically around 40,000 yuan.

However, Shen said in developed regions the amount offered by the companies might not be acceptable.

Six babies died and 296,000 children were sickened by tainted milk. The melamine scandal was exposed in September 2008.

As of the beginning of December, there were still 861 children in the hospital suffering from kidney stones or urinary problems. The Ministry of Health has not provided updated numbers since then.

In a letter sent to victims last month, Sanlu and 21 other dairy companies offered 200,000 yuan for families whose children died, 30,000 yuan for serious cases such as kidney stones and acute kidney failure, and 2,000 yuan for less severe cases.

Parents of victims who do not accept the one-time compensation are asked to sign a document. They can seek retribution through lawsuits.

The dairy producers also set up a fund to pay the medical bills from the sickened children until they reach the age of 18.

(Xinhua News Agency January 16, 2009)