The children of Flint, Michigan, are paying the price for a cost-cutting measure that poisoned their water supply after state authorities ignored months of health warnings about the foul-smelling water.

Accused of turning a blind eye to local residents who complained the discolored water was making them sick, the governor of Michigan has finally declared a state of emergency and promised swift action to help.

"This is an unfortunate situation that I do apologize for with respect to our responsibility," Governor Rick Snyder said Thursday after meeting with the city's mayor.

The US Justice Department this week launched an investigation into the handling of the crisis which has seen in a sharp spike in lead poisoning among Flint's children.

Filmmaker Michael Moore, who was born in the northeastern city of 100,000 people, has launched an online petition to have Snyder arrested for what he termed "callous," "reckless" actions.

"To poison all the children in an historic American city is no small feat," he wrote.

"Even international terrorist organizations haven't figured out yet how to do something on a magnitude like this," said Moore, who made his hometown famous in the 1989 documentary "Roger and Me" about the devastation wrought by the closure of General Motors' auto plants there.

- Hair loss, rashes -

Four years ago, Snyder named a state-appointed manager to take control of Flint's troubled finances -- effectively wresting control from elected officials under a controversial law.

As part of a cost-cutting drive, the city began drawing water from the Flint River in April 2014 rather than continue to buy it from Detroit.

The state's environment department approved the switch even though the city's treatment plant was not able to produce water that met state and federal standards, according to a lawsuit filed by the American Civil Liberties Union and the Natural Resource Defense Council.

Residents soon began complaining that the foul, cloudy water was making them vomit, break out in rashes and lose their hair.

A few months later the city had to issue several boil-water advisories after tests discovered harmful bacteria in the tap water. The treatment used to kill the bacteria ended up leaving cancer-causing contaminants behind.

State health officials continued to insist the water was safe to drink even after General Motors said in October 2014 that it would no longer use the city's water in its engine plant because it was too corrosive.

The corrosive water did more than damage engine parts. It also started to leach lead out of the old pipes that distribute the city's water.

One concerned mother contacted the Environmental Protection Agency in January after being rebuffed by city and state officials when she complained that her son would break out in a rash after a bath. She soon found he also had elevated lead levels in his blood.

- 'Manmade disaster' -

Lead exposure is harmful to everyone, but it can have devastating impacts on young children by irreversibly harming brain development. It has been shown to lower intelligence, stunt growth and lead to aggressive and anti-social behaviors.

But despite pressure from the federal environment agency, and water tests showing dangerous levels of lead in homes across Flint, it was months before city and state officials moved to fix the problem.

The state's environment ministry is also accused of using "flawed testing methods that appear to have been designed to underreport the lead content of residents' drinking water," according to the lawsuit filed by the ACLU and NRDC.

Snyder eventually sought $6 million from the state legislature to cover the cost of reconnecting Flint to Detroit's water supply and the switch was completed in October.

That was after elevated lead levels were found in the water of four Flint schools and a local pediatrician released a study showing that the number of children with elevated blood-lead levels had doubled from 2.1 to four percent.

Mayor Karen Weaver welcomed the news that federal prosecutors were investigating Flint's water crisis, saying Tuesday "people need to be held accountable."

Weaver -- who is currently powerless to act without approval from the state-appointed manager -- declared a state of emergency at city level last month in an effort to sound the alarm.

The "manmade disaster," the text warned, will "result in learning disabilities and the need for special education and mental health services and an increase in the juvenile justice system."

She discussed the need for additional social services with Snyder, who agreed during their meeting to transition power back to local authorities.

The infrastructure repair bill could run as high as $1.5 billion, Weaver told reporters.