Newborn dies after being given nitrous oxide

The incorrect installation of a gas outlet at a southwestern Sydney hospital is behind a "devastating error" which has left one baby dead and another severely affected.

The newborns were mistakenly treated with nitrous oxide instead of oxygen after the wrong gas was dispensed through the neonatal resuscitation gas outlet at Bankstown-Lidcombe Hospital.

NSW Health Minister Jillian Skinner said she was "profoundly sorry" for the families of the babies, who were born in the last two months.

The error was discovered last Thursday when a pediatrician raised concerns following the death of one of the babies, she said.

An oxygen machine in one of the hospital's theatres was incorrectly installed and certified by gas supplier BOC Limited in July last year, the minister said.