By Dave Graham and Allyn Fisher-Ilan

BERLIN/JERUSALEM, Nov 11 (Reuters) - The German maker of a baby-food formula at the heart of an Israeli investigation into the deaths of two babies said on Tuesday its soy-based product was deficient in a key vitamin needed to maintain infant health.

Humana GmbH, part of the Humana Milchunion collective, Germany's second biggest producer of milk products, said in a statement that its kosher Remedia Super Soya 1 product did not contain the amount of vitamin B-1 that the product advertised.

Israeli police have launched an investigation into suspicions the product caused a B-1 vitamin deficiency that led to acute health problems in at least nine babies. Two have died.

"We are investigating the circumstances of the deaths of the babies and the lack of vitamin B-1 in the cans of formula," police spokesman Ofir Sivan said. "The entire issue is under investigation."

Humana, which said on Monday it was investigating the case, said tests had shown the product contained between 29 and 37 microgrammes of vitamin B-1 per 100 grammes, less than one tenth of the amount previously stated.

"These values are significantly lower than the product's declared value of 385 microgrammes per 100 grammes of prepared food," Humana said. "They are also below the European Union guideline value of 120 microgrammes per 100 grammes of food."

Lawyers for one Israeli family said they had filed lawsuits in Tel Aviv District Court naming Humana, its Israeli distributor Remedia Ltd, and the Israeli Health Ministry and seeking $230 million in damages.

A separate suit was filed in the same court by another Israeli family against the German and Israeli firms for some $26 million as compensation for pain, suffering and anguish.

A lack of vitamin B-1, also known as thiamin, can cause a disease called beriberi, characterised by inflammatory or degenerative changes to the nerves, digestive system, and heart.

FAULTY ANALYSES

Humana blamed the error on faulty analyses of the recipes of two forerunners to the Remedia Super Soya 1 product, Soya 1 and Soya 2, used as the basis for developing the new product.

"These inaccurate calculations led to the conclusion that the natural B-1 content matched the levels required and that an additional B-1 supplement was not necessary as this would otherwise have resulted in an overdose of vitamin B-1," it said.

Humana added that mistakes made in controls on the first production-line batch of the new product meant outside testing had also failed to register the lack of vitamin B-1.

"Because of an omission in the procedural checks, the independent analysis was not carried out fully," it said.

Lawyer Michael Bach, representing the Israeli family that brought the $230 million suit, said he had asked to have the case treated as a class action and was awaiting the court's decision. He declined further comment to Reuters about his clients.

The Israeli daily Maariv identified them as Yariv and Dafna Reches, whose 11-month-old daughter Avigail was undergoing tests after falling ill. She is reported to have been fed with Remedia Super Soya 1 formula for six months.

Attorney Ram Gorodesky, representing the second family, said they had fed two children with the formula, and while none had been diagnosed with any illness, he was seeking damages for potential consumer fraud since the formula lacked B-1.

Police raided the offices of Remedia, which commands about one-third of Israel's non-dairy baby food market, in a Tel Aviv suburb late on Monday.

The formula has been pulled off the shelves in Israel. Officials said an analysis showed it contained no B-1 despite a label that said it did, and that there was a link between the absence of the vitamin and the cases of beriberi.

B-1 is required to convert blood sugar into energy, for producing red blood cells, and is involved in metabolic activities in nerves, muscles and the heart.