There are concerns that the contaminated bars may have triggered food poisoning among more than 40 people.
The Food Standards Agency accused Cadbury of failing to alert the agency after a leaking waste water pipe at a chocolate factory contaminated the "milk chocolate crumb" which is blended with fillings to make Cadbury's sweets, including the Dairy Milk Turkish bar, the Dairy Milk Buttons Easter egg and the Freddo bar.
An FSA spokesman said the chocolate-maker had discovered in January that the bacteria had got into its products, but only alerted the FSA on Monday, after 1m contaminated bars had been sent to shops. Half a million were on sale and were being cleared from shop shelves yesterday.
The agency spokesman said: "It was found in January, but they didn't tell us till Monday. In the interim, products have gone out into the market. There was a window where they knew they had a problem in their factory."
Cadbury had corrected the problem in March, which meant they were producing contaminated bars for roughly 40 days.
The problem was uncovered during an inquiry by the government's Health Protection Agency, which was investigating an outbreak of the salmonella "Montevideo" bacteria among more than 40 people.
The health agency made an exact match of the strain with a sample of bacteria found in Cadbury's chocolate. A source said this might be a coincidence and there was no proven causal link.
Cadbury is understood to have approached the FSA after it became aware that government agencies were investigating the salmonella outbreak.
The company said the problem had been discovered during routine testing in mid-January, traced to a plant at Marlbrook in Herefordshire and fixed by early March.
It said the risk was deemed too low to alert the government's food watchdog or the public. According to the firm, a level of "0.1 cell per 100g" is considered safe and the levels found in the chocolate crumb were 40 times below that.
But the FSA disagreed and put pressure on Cadbury to pull its product from shops. The agency has issued a "food alert" and told local councils to contact shops and petrol stations to ensure the bars are returned. The spokesman said: "We advised that they've got to do a full product recall. There is possible contamination.
"This is not like eggs or meat, where you cook it. There's a risk of salmonella infection, especially for vulnerable young people or the elderly. The salmonella doesn't distribute itself evenly throughout the chocolate bars. Our assessment is that there's a risk."
The salmonella bacterium affects the stomach and intestines. Symptoms include diarrhoea or constipation, nausea, headaches, stomach cramps and fever. Most cases clear up in four to seven days and seldom need treatment, but serious cases can lead to other problems including arthritis.
The Marlbrook factory, to which the contamination was traced, generates 97,000 tonnes of milk chocolate crumb every year from milk, sugar and cocoa liquor. The crumb is blended with nuts or other fillings to make chocolate bars.
The leaky pipe had dripped waste water, which had been used to wash down the equipment, into the crumb.
A Cadbury spokesman said: "We found the cause of the problem, fixed it, and subsequent tests proved we were completely clear."
An HPA spokeswoman said: "We're investigating an outbreak of salmonella - 45 cases occurring over the last four months. The strain isolated from the cases and from one Cadbury's confectionery product are the same. Our investigations are ongoing and it isn't possible at this stage to draw a link. This type of salmonella is relatively rare, and because we're seeing an increase, that's why we're doing an investigation."
A Cadbury's spokesman said: "We are aware they have been looking at salmonella prevalence, and that you could say the strain found in our product is similar to one they found. The scientific evidence was that the level found [in the chocolate] was way below what could cause illness. That's the knowledge we have."
The company planned to have fresh stocks of the chocolate on the shelves in the near future. Cadbury, which was founded in Birmingham in 1824, is now the world's biggest confectionery firm, outselling Mars and Nestle. A spokesman said the recall of half a million bars would not be a significant cost to a firm that produces billions of bars annually.
Herefordshire Council, which was due to make a routine check of the Cadbury factory next week, said it had only discovered the problem at the same time as the FSA.
Other recalls
2005 February Supermarkets withdraw more than 500 items banned by the Food Standards Agency after Sudan 1, the cancer-causing dye, is found in chilli powder. Britain's biggest product recall costs the food industry more than £100m.
2004 March Coca-Cola recalls 500,000 bottles of its purified tap water Dasani after high levels of bromates are found.
2001 August Up to 400,000 tins of SMA powdered baby milk are recalled after a five-month old is taken ill with botulism.
1999 June Coca-Cola withdraws 17m cases of Coke in Belgium and France after consumers complain of nausea and upset stomachs.
1993 November A million jars of baby food are recalled by Dutch manufacturer Nutricia after some are found to contain high levels of disinfectant.
1990 February Perrier withdraws 160m bottles of water worldwide at a cost of £150m after high traces of benzene are discovered in sample bottles.
Alan Power
