There are an estimated 70,000 horses unaccounted for in Northern Ireland, Labour has claimed as the Government sought to allay fears that contaminated meat was being sold in British supermarkets.
Shadow environment secretary Mary Creagh said unwanted horses were given false paperwork in Northern Ireland before being sold for 10 euro (£8) and then resold to dealers for meat for as much as 500 euro (£423).
She said there was currently a "lucrative" trade in horses, claiming that while the Polish and Romanians were being "conveniently" blamed for the scandal, the contamination problem had started across the Irish Sea.
Speaking in the Commons, Ms Creagh said: "The Ulster Society for the Prevention of Cruelty to Animals have clear evidence of an illegal trade of unfit horses from Ireland to the UK for meat, with horses being re-passported to meet demands for horse meat in mainland Europe.
"It says that there are currently 70,000 horses unaccounted for in Northern Ireland. Unwanted horses are being sold for 10 euro and being sold on for meat for 500 euro - a lucrative trade.
"It is very convenient to blame the Poles and the Romanians but so far neither country have found any problems with their beef abattoirs."
Many horses are also believed to be contaminated with the carcinogen phenylbutazone, often referred to as bute, she said, claiming that the Environment Secretary Owen Paterson had been "incompetent".
Ms Creagh accused the Environment Secretary of not taking the situation seriously enough as he had to be called back to London from a long weekend last Friday to deal with the crisis. She also claimed the Environment Agency and police failed to act on information she provided that three British companies were involved in potentially importing beef that contained horse.
Meanwhile, there was evidence that contaminated meat was entering the food chain from the UK and via Ireland rather than the rest of Europe.
The lack of information from the Government had been a "disgrace", Ms Creagh added, telling MPs the British public's confidence in the food chain was "sinking like a stone".