Careshare is part of Just Learning, one of the UK's largest nursery chains, co-founded by Conservative MP Michael Fallon and currently up for sale for 80m.
The incident comes just weeks after a tragedy at a Just Learning nursery in Cambourne, Cornwall when a ten-month-old died after choking on a piece of apple. The nursery re-opened on Monday after investigators concluded that staff should not be prosecuted.
Initially, three cases of E.coli were identified at the Careshare Nursery at Lauder college, Dunfermline.
NHS Fife said that the condition of one child was improving and the other four remained stable. They are being treated for kidney failure at the Royal Hospital for Sick Children in Glasgow.
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