JAKARTA, Indonesia — The Indonesian government, stung by a report that found burning plastic for fuel is poisoning residents in an East Java village, is allowing the illegal burning to continue while it challenges the environmental study.

Tofu makers in the village, Tropodo, who have long burned waste plastic to fuel their kitchen boilers, have seen sales plummet in recent weeks over fears that dioxin, a toxic chemical, produced from the fires is contaminating their tofu.

Rather than enforce a ban on the burning of waste plastic, much of which came until recently from the United States, the Ministry of Environment and Forestry appointed a panel of Indonesian experts to counter the report released last month by Indonesian and international environmental groups.

At a news conference, officials said the Tropodo test was flawed because it relied on testing dioxin levels in chicken eggs. Eggs are commonly used for testing contamination because chickens effectively sample the soil as they forage and toxins accumulate in their eggs.