Hundreds of Australians allegedly poisoned by toxic soy milk are set to share in a $25 million settlement, in what is believed to be the country’s biggest ever payout concerning food safety.

About 500 people alleged they suffered health problems caused by dangerously high iodine levels contained in Bonsoy between 2004 and 2009.

It was alleged Bonsoy was reformulated in August 2003 and pure kombu (seaweed) was replaced with kombu powder, which had the effect of increasing the level of iodine.

It was alleged one glass of milk contained 50 times the recommended daily intake of iodine.

Maurice Blackburn principal Jacob Varghese said it caused problems with the thyroid gland which regulates hormones that control metabolism.

“Ranging from lethargy and anxiety from one end of the scale, to very severe episodes that would involve hospitalisation,” he said.

“In some cases people had to have their thyroids removed.

“In a couple of cases women say that they had miscarriages as a result of the excessive iodine.”

The Australian distributor and brand owner, Spiral Foods, and Japanese companies Muso and Marusan Ai-Co agreed to the settlement without admitting liability.

It was lodged in the Supreme Court today for approval, with victims expected to begin receiving payouts within six months.

Mr Varghese said it was a warning to all food producers.

“We understand it’ll be the biggest settlement of any food safety class action in Australia,” he said.

“That’s quite important I think, in sending a message to food producers that the class action system is available to consumers to assert their rights if something does go wrong in the production process.”