The French dairy and bottled water group said it was "actively investigating" the exact reason why the traces of naphthalene were present.
The scare came about after a 44-year-old mother, Lauri Pastrone, opened one of the bottles to be greeted with a foul smell. She spat the water out after taking a sip because it burned her mouth.
She then informed the BBC, who had tests carried out on the product. Napthalene is considered potentially harmful to a person's respiratory system, blood cells and liver if swallowed in high enough doses.
A spokesperson for Danone said: "The company can confirm that it is an isolated incident and no other complaints have been received from the same batch of product and remaining samples have been checked."
She added that "initial research suggests that the naphthalene could have penetrated the plastic after it left the factory at some point in delivery or storage. This has happened in past cases the company has experienced."
The problem, and the fact that it is not necessarily a new one, is not good news for Danone as it faces ever tougher competition in the bottled water market.
Scotland's Highland Spring has risen to be Britain's joint-second biggest bottled water brand alongside Volvic in recent months, after a 30 per cent sales rise on the back of new production lines and marketing, according to Zenith International.
Danone is now thought to be preparing the launch of a new bottled water to attract consumers aged under 24.
The proportion of British adults drinking bottled water increased from 35 per cent in 2000 to 54 per cent in 2004, according to a recent report from market research group Mintel.
And it is a new generation of young Britons aged between 15 and 24 who are driving the trend. This group consumes 58 per cent of the still, bottled water produced and consumption declines with age so that over-65s drink only 26 per cent.
Sceptics remain, with one in three British adults still reluctant to shell out for bottled water on the basis that tap water is just as good. "Over half of Britain's elderly refuse to pay for water," said Mintel.
Yet, this sceptisism means the UK market still contains vast potential compared with other countries in Western Europe. Britain's per capita consumption stood at 33 litres in 2004, well below the 112-litre average in Western Europe.