Toxic red mud on the ground is seen in the village of Kolontar, around 150kms southwest of Budapest, Hungary, Oct. 5, 2010. It was caused by the rupture of a red sludge reservoir at an alumina plant in western Hungary and has affected seven towns near the Ajkai Timfoldgyar plant in the town of Ajka, 100 miles (160 kilometers) southwest of Budapest.

The immediate flood threat to residents of three western Hungarian counties triggered by millions of gallons of red mud, a caustic aluminum industry byproduct, is over, Interior Minister Sandor Pinter said on Tuesday afternoon.

CNN tv reports said at least four people including two children were killed, five are still missing and over 100 others remain hospitalized as the mud had inundated three villages, the minister said, adding that the corrosive material is still threatening waterways.

State Secretary for the Environment Zoltan Illes announced that all production by the Hungarian Aluminum Production and Trading Company (MAL), owner of the reservoir, had been halted.

Defense Committee Chair Jeno Lasztovicza reported that about half a million gallons of the toxic mud still in the damaged containment reservoir was being transferred to a safer place to relieve pressure on the reservoir and prevent any additional breakthroughs.

He also advised residents to refrain from eating any crops that came into contact with the mud. Crops in a 40-square-kilometer area are believed to be at risk.

Police are investigating the disaster, while MAL has denied responsibility. Illes, speaking in the village of Kolontar, a disaster site, suggested that an overloaded containment reservoir may have contributed to the ecological disaster.

MAL managers Zoltan Bakonyi and Lajos Tolnay claimed that the red mud is not a hazardous material, and that actual damage is far less than reported.

Lasztovicza, on the other hand, has said that the soil will have to be removed as will the plaster on the outside of residents ‘ homes unless the red mud can be thoroughly washed off.

Firefighters and armed forces units, working with water management experts, are spreading calcium nitrates and magnesium nitrates through the Marcal River in an effort to neutralize the highly corrosive mud and prevent the contaminants from reaching the Danube.