Hamleys has removed from its shelves two child jewellery products found to contain dangerous levels of lead.
Hamleys said it took immediate action after the alarm was raised
It said it had launched an inquiry into why the pendant and bracelet, imported from China, had not been detected in its quality assurance process.
The London toy store said it took safety "extremely seriously", after the Sunday Times exposed the fault.
It comes days after US toy giant Mattel recalled 18m China-made products, some of them amid fears over lead levels.
A Hamleys spokeswoman said: "Immediate action was obviously taken to remove these dangerous products from our shops as soon as we became aware of the problem.
"We would never ever knowingly sell toxic jewellery to customers and take the health and safety of our customers extremely seriously.
"We are urgently reviewing our quality assurance process."
The Sunday Times found a £4.99 bracelet with heart shapes sold in Hamleys' Regent Street shop contained more than 93% lead.
A P-shaped pendant, priced £7.99, was found to have 27% lead.
The recommended international safety limit is 0.06%, while the UK limit is 0.1%.
High levels of lead can cause brain damage and even kill.
Concerns over the safety of Chinese-made children's toys were raised last week after Mattel recalled more than 18 million products worldwide.
Among them were Sarge die-cast toys, from the Pixar film Cars, which were recalled because their paint contains lead.
Mattel also recalled toys containing small magnets that can come loose, including Polly Pocket, Batman Magna, Doggie Daycare and One Piece playsets.
It was the second such recall in two weeks.
Although lead content of toys is strictly controlled in the UK, there are no regulations stipulating levels in children's jewellery.
Tests by the newspaper also found high levels of lead in other children's products sold at a number of other outlets.