Government ministers tried to suppress a health scare over milk potentially contaminated with cancer-causing chemicals, the head of Britain's independent food watchdog has revealed.

Sir John Krebs said he was put under 'enormous pressure' not to make public the risks which arose from the handling of the foot and mouth outbreak, because of the potential impact on struggling dairy farmers. When the pressure from agriculture ministers failed, he was told that Downing Street would be 'very unhappy' with him.

The disclosure from the chair of the Food Standards Agency will trigger alarms because the body was set up to ensure that food scandals such as BSE were never again covered up by a government. Norman Baker, the Liberal Democrats' agriculture spokesman, said the disclosure was worrying: 'The Food Standards Agency was created because of the catastrophic failure of the then minister of agriculture to keep public confidence in the food chain. This evidence from Sir John suggests that this government is seeking to return to its old ways of putting secrecy above public accountability.'

The scare arose during the 2001 outbreak of foot and mouth, when slaughtered animals were burned in large numbers on open funeral pyres across the country. Substances known as dioxins, which are potentially carcinogenic, were being emitted by the fires and carried across pasture where animals grazed, raising fears that they would be absorbed into the food chain and thus taint dairy products.

Krebs assembled a panel of experts who concluded, he told January's issue of Prospect magazine, that there were 'huge uncertainties in our estimates of the risk' but in the worst case there was a danger to human health.

He decided to tell the public that the risk was low, but scientists were unsure about it, and people buying milk from farms near the pyres should consider switching to supermarket milk.

'As soon as MAFF heard about this I had ministers on the phone telling me I was about to create a crisis in the dairy industry. When I didn't back down, the line became "Number 10 will be very unhappy about this",' he said.

Krebs however went ahead as planned because he felt it was an important test. Frontpage headlines talked of 'cancer fears over milk' but, Krebs said, 'there was no crisis' as a result. Krebs hinted at similar disagreements over suggestions that the cattle disease BSE might have affected sheep. He held a press conference admitting that scientists were unsure about whether it had, which he said 'did not create the crisis in the consumption of lamb that Maff had assumed it would'.

Lord Robert May, the outgoing president of the Royal Society, confirmed that Krebs had 'ministerial pressure put on him - in response to the worry that the rogue BSE prion had got into the country's sheep population - to say there was nothing to worry about'.

A spokesman for Defra last night did not deny there had been intervention but said the FSA had been set up to act in the public interest in providing scientific advice, adding: 'Ministers have respected that at all times. Clearly the government department for agriculture - then Maff, now Defra - makes points on the science of issues as they arise and their presentation. However the FSA's role is to advise on food safety rules as it sees fit and they did so in the case mentioned by Sir John.'

At the time of Krebs's milk warning in May 2001, Nick Brown - now a backbencher - was the Agriculture Secretary. His junior ministers were Elliot Morley, still a Defra minister, and Baroness Hayman and Joyce Quin, both now backbench peers.