Four people have been arrested in the northern city of Parma, after it emerged that tests that should have indicated the presence of a highly carcinogenic toxin were falsified, Il Fatto Quotidiano reported.
The naturally occurring substance Aflatoxin appears in crops in condition of drought, and in the milk of cows that have eaten mouldy grain.
In chronic levels the chemical can causes cirrhosis of the liver or liver cancer.
While adults generally have a high tolerance for aflatoxins, in 2003, 120 people died in Kenya after eating maize containing very high levels of contamination.
Children are known to be particularly affected by aflatoxin and it can lead to stunted growth and delayed development.
Special tests ordered by prosecutors, and carried out privately, showed that the previous checks had been falsified to cover up the toxin, police said.
Although the EU says small amounts, of up to 0.05 mg per litre, can be tolerated safely, the milk contained twice that amount, Il Fatto Quotidiano reported.
The city’s head of agricultural nutrition was among those arrested, alongside three producers.
They are accused of conspiracy to commit fraud in the marketing of toxic food and attempted fraud in milk quality. More than 60 others are under investigation.
Health Minister Beatrice Lorenzin said the investigation shows the effectiveness of food controls in Italy. "The number of cases is limited” she said, and consumers have no need to be worried.