NEW DELHI - A probe panel appointed by local government into the deaths of over 60 children at a medical college hospital in India's northern state of Uttar Pradesh has blamed lack of oxygen and financial irregularities, officials said Thursday.

The panel has called for a full-scale investigation and pointed out mismanagement at the hands of two senior doctors.

"It found the hospital's logs about supply of oxygen were in a mess and raised suspicions about corruption and mismanagement in the hospital," an official said.

Initially the local government denied that the deaths had resulted from oxygen shortage in the hospital.

Reports said the inquiry found funds meant to pay the vendor were held despite reminders that defaulting on payment could have serious consequences.

The local government came under fire last week for around 60 deaths at neonatal intensive care unit of the government medical college hospital, Gorakhpur.

Authorities have promised stringent action against those found guilty and suspended the principal for derelict and removed head of the encephalitis ward from his post.

Many parents who lost their children alleged that the deaths were caused by disruption in oxygen supply in the hospital.