Military planes water-bombed Indonesian forest fires that worsened yesterday and blanketed neighbouring Singapore in record levels of hazardous smog for a third day in one of south-east 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 south-east Asia's biggest economies.

"The winds are picking up and the weather isn't very good at the moment, so the fires in some places are getting bigger," Gunawan, a firefighter who, like many Indonesians, goes by one name, said by telephone. "We are working as hard as possible to control the fires... but we're facing difficult conditions."

Indonesia's environment minister, Balthasar Kambuaya, said the government had identified five companies behind the fires, but refused to name them, according to The Jakarta Post newspaper.

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

Illegal burning of forests and other land on Indonesia's Sumatra island typically take 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 (£13 million) to handle the disaster. Seven military aircraft were deployed for water bombings.

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.

In Singapore, the number of residents wearing face masks rose markedly as the pollution standards index climbed to a new record at midday, a level which health authorities consider potentially life-threatening for the elderly..