French police raided the headquarters of dairy giant Lactalis on Wednesday over a baby milk salmonella scare that has sickened dozens of children and led to a major international recall.

Dozens of police were searching the company's offices in Laval, western France, as well as its factory in nearby Craon which was the source of the tainted milk.

Lactalis has recalled baby milk from 83 countries, with anger growing after it emerged that the company's own tests had discovered salmonella at the Craon site in August and November.

The company did not report the findings and it says it had no legal obligation to do so because it had not detected salmonella in its products.

The contamination, found in a dehydration tower used to reduce milk, was not revealed to the public until December.

At least 37 babies in France are known to have fallen sick and another in Spain, while Greece has also seen one unconfirmed case.

A source close to the probe said magistrates and 70 police were raiding Lactalis sites on Wednesday.

Officers were guarding the factory doors, an AFP photographer said, with dozens of police vehicles on site.

At the company headquarters, investigators from public health agency OCLAESP and consumer protection agency DGCCRF were searching the premises alongside police.

The recall affects 12 million boxes of powdered baby milk under brands including Picot, Milumel and Celia.

The raids come after Paris investigators opened a preliminary inquiry on December 2 for suspected fraud as well as endangering health by failing to properly execute the recall.

Lactalis CEO Emmanuel Besnier at the weekend offered to compensate the affected families.

But an association of victims' families, which met with the government on Monday, has rejected the offer, accusing Lactalis of trying to buy their silence.

Of the babies taken ill in France, 18 were hospitalised. All are now recovering well, according to the public health agency.

Hundreds of families have filed lawsuits against the company.

Besnier on Sunday denied claims that Lactalis had lied about the dates and amount of stock affected by the salmonella outbreak.

"At no point was there any intention of hiding things," he told the Journal du Dimanche newspaper -- his first interview in nearly 20 years as head of the family-controlled company.

Government spokesman Benjamin Griveaux said Sunday the company's explanations were insufficient.

"When you have a case of milk on the market which has clearly caused complicated health problems for children, it means at some point there was negligence," Griveaux said.