* Babies may have drunk contaminated milk in 2005-2017 - CEO
* Lactalis faces "several hundred million euros" in costs
* Says has stopped production at facility in affected plant (Adds details, background, victims' group reaction)
PARIS, Feb 1 (Reuters) - French dairy group Lactalis could have been producing salmonella-tainted baby milk since 2005, its chief executive was quoted as saying on Thursday, adding the growing crisis was likely to cost the company hundreds of millions of euros.
Lactalis has recalled 12 million tins in France and around the world after several babies were taken ill last year after drinking salmonella-contaminated milk produced at a factory in western France.
French authorities have said there were 38 "Salmonella Agona" infections reported between mid-August and December last year, 36 of them clearly linked to Lactalis milk. A group representing victims' families say at least 10 more cases are unaccounted for.
The same strain of salmonella was also responsible for some infections in 2005, Lactalis Chief Executive Emmanuel Besnier told French business paper Les Echos, adding it was possible other infections had occurred since then.
"It can not be excluded that babies have consumed contaminated milk over this period," Besnier said, questioning the effectiveness of 16,000 tests performed by an unidentified private laboratory that had revealed nothing.
Besnier said Lactalis was stopping production at one of its facilities at the factory in Craon due to the outbreak. In 2005, the plant was owned by Celia, a company taken over by Lactalis in 2006.
"If the analysis of end-products had revealed the presence of Salmonella Agona, we would of course not have marketed the products and we would have avoided the crisis," Lactalis said in a statement.
The victims' association said it had read Besnier's comments with "dismay".
"These are several hundred million boxes concerned and several hundred thousand tonnes of products sent to more than 80 countries. This is a health scandal of unprecedented scale," it said in a statement.
"This implies that the victims could have been much more numerous."
Besnier said the scandal was "the biggest crisis I've ever had to face as a boss."
"We can't say definitively but (the cost) will be very high, several hundred million euros," he told Les Echos.
"This case could cost us our export licence for a still undetermined period," he added.
Besnier did not give details of what the costs would be.
He said a lot of the milk recalled since early December had been consumed and that returns were likely to amount to less than half of total volumes.
French supermarket chains Leclerc, Auchan, Carrefour and Systeme U have all acknowledged that some of the baby milk remained on their shelves after the recall.
The victims' association's lawyer said families intended to file lawsuits against Auchan and Leclerc. Besnier said Lactalis was the target of multiple legal complaints. (Additional reporting by Sudip Kar-Gupta and Leigh Thomas; Editing by Vyas Mohan and Mark Potter)