Boss of the funeral directors for Lindokuhle Funeral Fundile Makalana said: 'When we took the body from the mortuary tray to her coffin we discovered that there was a newly born baby between her legs.
"The baby was dead. We were so shocked and frightened that we did not even have time to look at the sex of the baby.
"I have been in the business for more than 20 years and I have never heard of a dead woman giving birth."
The shocking incident left her mother Mandzala Mdoyi, 76, even more grief-stricken.
She said: "We appeal to educated people, people who know better, to please cool us down and explain to us how it is possible for a dead woman to give birth.
"I am now over 70 years old and never heard of such a thing. Why is that happening to my child?
"First, I was devastated by the untimely death of my daughter and now I got the shock of my life to learn that she had given birth while she had been dead for 10 days. What is that? God please come and intervene?"
The family reportedly ignored some suggestions of witchcraft and held a funeral and cremation as planned, with the baby in the coffin with its mother.
It is not clear whether the baby's life could have been saved had doctors provided different treatment when the mother fell ill.