China's Standardization Administration has banned Nestle from the production and distribution of 'inferior' infant milk powder, according to the Xinhua news agency.

This is the first official response from Chinese authorities to Swiss foodmaker Nestle, one of whose infant milk powder formulas was found to contain iodine higher than the national standard, the agency said.

Nestle has been arguing its formula was "safe" and only agreed to replace those products that do not meet Chinese standards.

Citing the Article 14 in Chapter four of China's Standardization Law, which says that all compulsive standards set by Chinese authorities must be strictly followed, the administration required Nestle China to stop its production and distribution of inferior infant milk powder.

Mu Li, chief executive of Nestle China, has apologized to Chinese consumers for its milk powder "unfortunately" containing iodine and deviated from the national safety standard and expressed its willingness to recall unqualified milk powder already sold.

The sale of the milk powder has been suspended in Hangzhou, Shanghai and Guangzhou.