An increasing number of patients are being treated in hospitals for symptoms, which appeared to range from skin cancer, and chemical burns to severe eczema
The cases have been linked to an estimated 100,000 sofas sold by Argos, World of Leather and Walmsley Furnishing manufactured in China by a company called Linkwise.
Researchers from Sweden have revealed that the severe allergies were the result of the reaction to the gas created during the sublimation of a chemical called dimethyl fumarate. Sublimation is the conversion of a solid to a gas without passing through a liquid state.
Sachets containing crystals of the chemical are being placed between the cover and foam of the sofas to prevent mould developing during shipping.
Professor Magnus Bruze, a dermatologist from Malmo University Hospital in Sweden, said his tests had proved conclusively that the allergic reactions were caused by the dimethyl fumarate.
He added that it could take weeks or months to become hypersensitised to the chemical, which disguised the link to the furniture in many cases.
Exposure to dimethyl fumarate can make a person more vulnerable to reactions to other chemicals.
"Some of the cases have been very severe and have been difficult to differentiate from the malignant cases of skin diseases like lymphoma, or a skin infection or chemical burn," Times Online quoted Bruze, as saying.
It is feared that contamination could have spread from the sofas throughout homes when the gas cools and re-solidifies.
Tests have concluded that the rate of sublimation increases with heat - such as the weather and the body mass of people using the furniture.
The study suggests that fatter people are more likely to be affected and with regular exposure to the chemical the number of cases are likely to shoot up.
"The long-term effects are not yet known but we've had reports of people being hospitalised and two alleged fatalities," said Richard Langton, partner at solicitors Russell Jones and Walker.
"In many cases the pain is like the worst sort of sunburn or scalding form acid or boiling water. It has lasted for months or years if people don't realise the cause," he added.
Meanwhile, Argos has apologised to the customers who may have been affected by skin irritations linked to sofas manufactured by Linkwise.