The threat was made in a letter to Fonterra and Federated Farmers last November, to contaminate infant and other formula over the use of the poison in pest control. The 1080 poison (sodium fluoroacetate) is widely used by New Zealand’s Department of Conservation to control pests such as possums, rats and stoats.

The news has led to a drop in the value of the NZ dollar on Foreign Exchange Markets.

The blackmail attempt was made public at a press conference by deputy commissioner of National Operations, Mike Clements and Scott Gallacher, deputy head of the Ministry of Primary Industries.

The letter threatened to contaminate the formula unless New Zealand stopped using 1080 for pest control by the end of March this year.

Mike Clements said the threat was probably a hoax, but had to be taken seriously as the government is highly sensitive to food safety and the impact it could have on consumer confidence in China.

CEO of Fonterra, Theo Spierings, said the threat was “blackmail against New Zealand and as an industry we won’t tolerate it.”

John Key assured parents that infant formula was safe to drink. He said “We are highly confident every measure has been taken to protect the food system, including rigorous testing with 40,000 test done already.

"We are advised it is extremely unlikely anyone could deliberately contaminate formula during the manufacturing process and there is no evidence that this has ever occurred.”