An investigation is under way into the "serious pollution incident" in which cyanide and untreated sewage ended up in the River Trent, killing thousands of fish.
Experts warned the poison was killing local wildlife and could leach into the surrounding ground.
The Environment Agency said it would seek to prosecute those responsible under the Water Resources Act which makes it an offence to allow poisonous, noxious or polluting matter to enter rivers. If the case were to reach crown court, there is no limit on the fines which can be imposed. The largest penalty for a similar offence was imposed on Avonmouth-based chemical company Sevalco, which was fined £240,000 in 2004 for deliberately discharging cyanide into the Severn Estuary.
Environment officers have been pumping oxygen into the river between Stoke-on-Trent and Yoxall and managed to greatly reduce the levels of pollution in the water, said the Environment Agency. Drinking water had not been affected, as there were no abstraction points on that stretch of river, but the agency warned people and animals should stay out of the water until further notice as a precaution.
Severn Trent Water said cyanide - a colourless, soluble toxin - had been discharged illegally into the sewage system upstream of its Strongford treatment works. The chemical disrupted the treatment process by killing off the organisms used to treat the sewage and caused partially treated sewage to end up in the river.
Simon Cocks, waste water services director for Severn Trent Water, said the company was not linked to the release of the cyanide.
He said: "Engineers at our Strongford works have been working day and night to get the works back up and running. We are deeply concerned about the impact this chemical pollution has had on our sewage treatment system and the community in which we operate. We are working hard alongside the Environment Agency to support their investigation and minimise the impact of this incident on the environment," he said.
Dr Michelle Bloor, a toxicology and aquatic pollution expert at the University of Portsmouth, warned the entire local ecosystem could be affected.
"Cyanide is a highly toxic substance. It has obviously come into the water from somewhere and it can leach through soils," she said. "Any contaminants entering a river is a cause for concern because of the impact on wildlife."Reuse content