Twenty-two children have died and many more are hospitalised with apparent food poisoning caused by eating a free meal provided to them by their government school in one of India's poorest states.

Police say the children - aged between eight and 11 - became sick on Tuesday after eating a lunch of rice and soybean at a government school in the state of Bihar.

The meal had been given to them as part of the government's midday meal scheme, the world's biggest school feeding program that provides food for 120 million children.

Angry parents and residents have taken to the streets, setting alight buses and pelting the police station with stones.

The state's chief minister has ordered an inquiry into the deaths and has offered each family of the deceased children $3,500 in compensation.

Suspicion has focussed on the possible presence of insecticide in the food.

State education minister PK Shahi said police were probing whether the food was accidentally or possibly deliberately poisoned.

"The facts of the case will be established in the investigation," he said.

"The deaths were not due to food poisoning. It is a clear-cut case of mixing poison in the food."

There were emotional scenes as children, their limbs dangling and heads lolling to one side, were brought to a hospital in the Bihar city of Chhapra.

Other children, lying listless on stretchers, were placed on intravenous drips amid chaotic scenes at the hospital. Outside, inconsolable relatives wept.

"My children had gone to school to study. They came back home crying, and said it hurts," one distraught father told the NDTV network.

"I took them into my arms, but they kept crying, saying their stomach hurt very badly."

Running to the school to find out what had happened, the father said he saw "many bodies of children lying on the ground".

Bihar education minister PK Shahi said the midday meal "appears to be poisonous".

The children, all aged under 10, were buried near the school in the village of Masrakh on Wednesday morning as angry residents armed with poles and sticks took to the streets of Chhapra.

Angry protesters demand action over the deaths

The mob smashed windows of police buses and other vehicles and turned over a police booth in Chhapra, the main city of Saran district where the school is located.

"Hundreds of angry people staged a protest in Saran since late Tuesday night, demanding stern action against government officials responsible for this shocking incident," district government official SK Mall said.

A preliminary investigation has shown the meal may have contained traces of phosphate from insecticide in the vegetables, Mr Sinha from the local government said.

He said doctors were treating victims with atropine, which is effective against organophosphate poisoning.

Media reports quoted villagers as saying the use of contaminated, foul-smelling mustard oil for cooking at the school could also have caused the deaths.

"Investigators are examining midday meal samples and samples of victims' vomit. Only the final report of inquiry will reveal the real cause," Mr Sinha said.

Bihar chief minister Nitish Kumar announced compensation of 200,000 rupees ($3,500) for each of the bereaved families.

Free lunches are offered to poorer students in state-run schools as part of government welfare measures in many of India's 29 states.

Educators see the midday meal scheme as a way to increase school attendance. But children often suffer from food poisoning due to poor hygiene in kitchens and occasionally sub-standard food.

More than 130 students were taken to hospital in the western city of Pune last year after eating lunch at school, the Times of India reported. A probe revealed that the food was contaminated with E. coli bacteria.

Food prices have soared in India over the past six years, causing increased hardship for the 455 million people estimated by the World Bank to live below the poverty line.

Ahead of elections next year, the government this month announced a subsidised food programme to offer grains to nearly 70 percent of the population, or 820 million people, at a small fraction of market prices.

ABC/AFP