Indonesia is blaming eight companies, including Singapore's Sinar Mas and Asia Pacific Resources International (APRIL), for fires raging on its island of Sumatra that have sent hazardous levels of smog to neighbouring Singapore.

Senior presidential aide Kuntoro Mangkusubroto said: "The majority of hotspots in Riau (province) are inside APRIL and Sinar Mas concessions."

The environment minister said not all eight companies were Singapore-based, but declined to name the rest of them.

Military planes have dropped water on the forest fires that have worsened and blanketed neighbouring Singapore in record levels of hazardous smog for a third straight day in one of southeast Asia's worst air-pollution crises.

As Singaporeans donned face masks and pulled children from playgrounds and Malaysia closed schools in the south, the deliberately-lit fires grew bigger in some areas.

Whipped up by winds, the blazes added to fears over health problems and diplomatic tension in Singapore, Malaysia and Indonesia, three of southeast Asia's biggest economies.

Singapore's government has warned the haze could last weeks.

Illegal burning of forests and other land on Indonesia's Sumatra island typically takes place in the June to September dry season to clear space for palm oil plantations.

But this year's fires are unusually widespread and the hazy smog is the worst in Singapore's history.

"Since the fires are happening mostly on plantation lands, we believe there are plantation companies involved. The president has already put together a team to investigate who owns the plantations," said Sutopo Purwo Nugroho, spokesman for Indonesia's National Disaster Management Agency.

Indonesia has earmarked around 200 billion rupiah (€15m) to handle the disaster. Seven military aircraft were deployed for water bombings and rain seeding.

Hospitals in Dumai and Bengkalis in Indonesia's Riau province recorded increases in cases of asthma, lung, eye and skin problems, said health official Arifin Zainal.

Free face masks were being distributed and authorities advised residents to stay indoors with their windows shut.

The Dumai airport remained closed for a third day.