Newborn babies are being bought and sold on a lucrative black market in Indonesia that could involve hundreds of children a year, some going illegally to parents overseas.

Pregnant women are propositioned to give up their babies at pre-natal health checks and new mothers approached in the maternity ward, states a case due to start in the courts this week that blows the lid on the trade.

But the country's child protection commission believes the case is just the tip of the iceberg, and says thousands of children have been bought and sold in the past 10 to 15 years.

In 2004 the illegal adoption issue caught out an Australian couple, who believed they were getting a baby legally but were rejected by the Australian authorities when they tried to have their new child's citizenship changed. The couple blew the whistle on the agent behind that scam, a lawyer, Isnania Singgih, who spent four years in jail.

The country introduced strict laws in 1983 to stop adoption agencies operating as so-called "baby farms" for customers in the West but the Commission for Child Protection says the laws have driven the practice underground.

In January, West Jakarta police arrested a syndicate of six women accused of buying babies, arranging identity documents and then selling them at a huge mark-up.

On Tuesday, Lindawati Suhandojo, 35, an alleged document forger for the group, will face court. But police say the mastermind is a 62-year-old former midwife called Hastuti Singgih, also known as Linda, who had been plying her highly profitable trade for more than 20 years.

It is unclear who her customers were, or whether Linda screened for their suitability or asked what they planned to do with the babies.

Police say she and her co-conspirators trawled the maternity wards and health clinics of Jakarta hunting out poor or unmarried women, or those with too many mouths to feed.

"They are booked in advance before the baby is even born," said the head of West Jakarta Police Criminal Investigation Hengki Hariadi. "There was no down payment."

The price to the mother, say police, was between 1.6million and 2.5million rupiah – $160 to $250 – in a country where many struggle to earn a few hundred thousand rupiah a month.

Once the syndicate had checked a baby's health, police say corrupt public servants from Jakarta's population and civil registry office made a birth certificate.

Then the syndicate sold the baby for prices starting from 70million rupiah – about $7000, a 3500per cent mark-up.

The operation was on an industrial scale – in November and December last year alone, police say, 12 babies were bought and sold. They say they found 40 more baby pictures on a mobile phone belonging to Linda.

For one baby a passport had been made, and an airline ticket to Singapore was found. But in another tragic case, the baby was unhealthy, so Linda refused to accept him. She tried to hand him back to the mother who also knocked him back.

Arrests began in January and by March, five babies had been recovered.

The conspirators face up to 15years' imprisonment.