FOOD companies will be ordered to test their beef products after some Findus beef lasagnes were found to contain up to 100pc horse meat, the Food Standards Agency (FSA) said.
It was "highly likely" that criminal activity was to blame for the contamination, the agency added, as consumers were warned not to eat the meals.
Findus UK tested 18 of its beef lasagne products and found 11 contained in the range of 60pc to 100pc horse meat, the FSA said.
The frozen food company has now apologised to customers and said refunds would be offered to anyone who bought the affected lasagne products, which were made by French food supplier Comigel.
Retail giant Tesco and discount chain Aldi have withdrawn a range of ready meals produced by Comigel over fears that they contained contaminated meat.
Catherine Brown, chief executive of the FSA, said: "This is an appalling situation.
"I have to say that that the two cases of gross contamination that we see here indicates that it is highly likely there has been criminal and fraudulent activity involved."
She added: "We are demanding that food businesses conduct authenticity tests on all beef products, such as beef burgers, meatballs and lasagne, and provide the results to the FSA. The tests will be for the presence of significant levels of horse meat."
There is no evidence to suggest the horse meat found is a food safety risk, the FSA said.
But the agency confirmed tests have been ordered on the lasagne for the veterinary drug phenylbutazone or "bute", which is banned from entering the food chain.
The FSA added: "People who have bought any Findus beef lasagne products are advised not to eat them and return them to the shop they bought them from."
A Findus UK spokesman said: "We understand this it is a very sensitive subject for consumers and we would like to reassure you we have reacted immediately. We do not believe this to be a food safety issue.
"We are confident that we have fully resolved this supply chain issue. Fully compliant beef lasagne will be in stores again soon.
"We would like to take this opportunity to apologise to our customers for any inconvenience caused."
Findus UK withdrew its 320g, 360g and 500g lasagne meals from supermarket shelves as a precautionary measure earlier this week.
It came after Comigel alerted Findus and Aldi that their products "do not conform to specification".
It advised them to remove Findus beef lasagne and Aldi's Today's Special frozen beef lasagne and Today's Special frozen spaghetti bolognese.
Tesco also decided to withdraw its Everyday Value spaghetti bolognese, which is produced at the same Comigel site.
The latest development in the contamination crisis comes days after supermarket chain Asda withdrew products supplied by a Northern Ireland company which was storing meat found to contain a high proportion of horse DNA.
Newry-based Freeza Meats had been storing the consignment of meat, which was labelled as beef, on behalf of a Co Monaghan-based meat trader McAdam Foods.
Two tested samples were found to contain 80pc horse meat.
McAdam Foods has insisted it had no knowledge that any of its meat contained horse DNA. It claimed the contaminated produce originated in Poland.
The meat had not entered the food chain and was not destined for Asda stores.
Asda acknowledged that no trace of equine DNA had been found in products made by Freeza Meats, but said it was still temporarily removing its burger range from its stores as a precaution.
The Irish meat-processing industry has been rocked by the horse meat crisis, with a number of suppliers being caught up in the scare.
Authorities on both sides of the border have pledged to restore the sector's battered image, while gardai have launched an investigation.
British shadow environment secretary Mary Creagh said: "The Irish Government has called in the police and fraud experts to investigate the horse meat fraud, yet complacent British ministers have not and are asleep on the job.
"The latest revelations raise questions about the extent of this scandal - this is no longer just a food safety issue but possibly a criminal trade.
"The public must have confidence that the food they buy is properly labelled, legal and safe to eat, whether it is purchased from a supermarket or in a school canteen."
Ms Creagh said she would not currently eat any processed food labelled as containing beef and urged ministers to give advice to consumers on whether they should do the same.
"We've had 10 million beefburgers withdrawn," Ms Creagh told BBC Radio 4's Today programme. "What tests have been conducted on them, if any?
"The big concern for me now is corner shops, schools, hospitals, prisons, public-sector caterers, people who may have these products sitting in their fridges and freezers.
"There's been absolutely no advice from Government ministers about what people should do."
Asked whether consumers should avoid eating processed foods from their freezers which are labelled beef, she said: "I certainly wouldn't, but I'm waiting for the Government, the experts, the scientists, to tell us and issue proper clear advice for consumers.
"It's simply not good enough for ministers to sit at their desks and pretend this isn't happening."
Ms Creagh said it was clear that there had been "widespread criminal activity", with adulterated products deliberately passed off as beef.
She added: "I raised with ministers the question of horses being slaughtered in the UK in abattoirs and testing positive for bute... Ministers reassured me at that point and pooh-poohed my concerns.
"It transpired in answers to my parliamentary questions that six animals had actually entered the human food chain - five in France, one in the UK - and two animals have still not been traced by the FSA."
Ms Creagh said she was expecting further revelations.
She told ITV's Daybreak: "We've had four weeks of damaging drip feeds of revelations from the food industry."
Asked if there was more to come, she said: "Absolutely, and I'm glad that the Food Standards Agency last night have announced that they are demanding that supermarkets and retailers and caterers test all products, I think that's a significant step forward.
"My big concern is about what's lurking in corner shops, and what's lurking in the fridges and freezers of hospitals, prisons and school canteens as well."
She urged consumers to buy local, in order to be confident of the source of their meat.
Asked if she would eat a beef processed meal, Miss McIntosh told BBC Radio 4's Today programme: "No, and I think the message is to go out and buy your food as locally as you can so you know where the beef is coming from."
The Thirsk and Malton MP added: "There's a common strand going through this of imported meat coming from EU countries. None of the meat seems to have come from this country.
"It's sending shockwaves through the farming community and denting consumer confidence. We need to tackle this very quickly to restore consumer confidence, and I think the message is to buy local.
"The challenge to the FSA and to the farms minister is what discussions have they had with the Polish authorities, the French authorities, the Irish authorities to see what testing these countries are doing on these products before they leave their shores, so there would have been no question of it entering our food chain."
But FSA director of operations Andrew Rhodes stressed that contamination had been found in only two branded products, and that there was no evidence that they posed a risk to public health.
Mr Rhodes told Today: "What we've identified so far are two areas of gross contamination - the Tesco value burger and the Findus beef lasagne. I can't speculate on what we might find in further testing, but if we do find something then we will be dealing with that very robustly."
He added: "What we are doing at the moment is investigating this incident. We are testing a very broad range of products, including those that go to schools and hospitals.
"We are demanding that all the manufacturers, all the retailers, test all of their products to rule out any further contamination.
"I'm not going to speculate on what we might find, but it's the responsibility of those making food and selling food to ensure that what's in that food is exactly what it says on the label. That's their legal obligation."
Mr Rhodes said: "There are two likely causes of this. The first is gross negligence and the second may be criminal activity, and that's what we are investigating at the moment - whether somebody has deliberately substituted one product for another.
"So far all of our investigations have not found a food safety risk but that does not mean this is acceptable, and that's why we are taking the actions that we are with the food industry.
"I don't have any sympathy when a product is produced which isn't what it says it is. They have a legal obligation and a moral obligation to make sure that when consumers buy a product, they get exactly what they are expecting to get.
"In this case, Findus have done the right thing in recalling their product, identifying a problem and co-operating with us. But it's really important that we carry on our investigations and bring our investigations to a conclusion."