A statement posted on online government media overnight said that 294,000 babies and young children had suffered "urinary system abnormalities" after drinking formula milk from Sanlu, the company most seriously affected, and other brand names.
Previously the government said that just over 50,000 babies had received hospital treatment for kidney stones.
It also said that six babies had died - up from the previous four, a figure becoming increasingly untenable as more and more parents told their stories to Chinese-language newspapers outside the Chinese mainland.
It said five other deaths had been investigated, but melamine had been ruled out as a cause.
The melamine scandal was exposed in mid-September, and deeply damaged not only the milk industry but also the government's reputation for ensuring food safety.
The plastic had been sold as "protein powder" and mixed into milk at collecting stations all over China, because it improved the protein readings of poor quality or watered down milk.
Some doctors had been aware for months of the problems affecting formula milk, and Sanlu itself had confirmation on August 1, but was ordered not to issue a public statement in advance of the Olympic Games.
Eventually, the government's hand was forced by the New Zealand government, which had been informed by the dairy giant Fonterra, a joint-owner of Sanlu, and a growing number of reports in China's own media which did not say which company was responsible.
In the latest statement, the health ministry said the numbers still sick had fallen. Of 51,900 requiring hospital in-patient treatment, 861 were still admitted and 154 were "severe sufferers".
Li Fangping, one of a number of lawyers representing parents of children affected, said the new figures sounded accurate but probably did not include children affected by illnesses other than kidney stones, such as inflamation of the urethra or blood disorders.
The 51,900 figure covered those who were suffering from stones larger than four millimetres in diameter, the criterion used for hospital admission, he said.
Mr Li, who along with other lawyers has come under pressure to drop the threat of legal action, has had no response from Sanlu or the government to his clients' case.
"The parents are very angry and confused about the way they were treated," he said. "They are still very dissatisfied with the government."
Other figures released today show that Chinese dairy exports have fallen by more than 90 per cent since the scandal broke, after a number of countries banned the use of Chinese milk powder. Egg exports were also affected after traces of melamine were found.
The chemical had also been added to animal feed.
http://www.telegraph.co.uk/news/worldnews/asia/china/3540917/China-reveals-300000-children-were-made-ill-by-tainted-milk.html