China's internet giant Baidu has promised to overhaul its operations after state media accused it of allowing unlicensed medical services to buy high search rankings.

The search engine dominates the market in the world's largest internet population, with around 60% of users — well ahead of Google, which leads the field internationally.

But the case caused Baidu stocks to plummet and highlighted users' complaints about the way the Nasdaq-listed firm allows companies to buy their way into search results.

Robin Li, Baidu's chief executive, told the state news agency Xinhua today that the firm had sacked staff and more could follow.

He said: "Baidu employees who are found to have been involved in the scandal will be penalised … We have already fired people who helped fabricate documents for unlicensed suppliers.

"We have removed the key words of all four clients mentioned in the report and have begun to double-check the licences of all other hospitals and pharmacies on our client list."

Baidu said in a statement that it had removed paid search listings for firms which were unable to file their licence details, pending checks.

Those customers together account for around 10%-15% of Baidu's revenues, the statement added.

The state-run China Central Television (CCT) reported earlier this month that the search rankings had steered people suffering from illness to unlicensed and expensive hospitals or to medicines that failed to cure them.

One patient told the broadcaster he spent more than10,000 yuan (£950) at a clinic, as it topped Baidu's results, but it failed to cure his abdominal pain, which was subsequently treated successfully by a public hospital for 100 yuan.

The unlicensed clinic paid Baidu almost 17 yuan a click to get a prominent ranking, according to the report. CCT also alleged that some companies which did not pay were omitted from results.

But in a statement, the internet firm insisted: "Baidu has never excluded websites of any customers because they did not pay for keywords, and Baidu does not tolerate such practices."