The confirmation of a foot-and-mouth disease outbreak in Co Armagh has raised fears that the disease may be about to enter the Republic.
Twelve farms in the Republic are now under restriction as a precautionary measure and a meat plant is under investigation in Co Roscommon.
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In Britain, five more cases of foot-and-mouth disease were confirmed today, including two in Scotland and three more in England.
It has emerged nearly 250 lambs processed at a Co Roscommon factory last Tuesday are from the same flock identified in south Armagh as suspected disease carriers.
Department of Agriculture officials are investigating suspicions fraud was involved in the movement of the consignment. The Garda are helping in this investigation.
Kepak say they are complying fully with the Department's investigations.
The sheep were delivered in the name of a Roscommon sheep-farmer but investigations by the Department have established the animals did not belong to the man whose name was used.
A Department inquiry last night was centred at Athleague in Co Roscommon, the location of Kepak, one of Ireland's biggest sheep- and meat-processing factories.
The Kepak plant and up to 20 farms in Roscommon and Galway are to be investigated by Department officials today.
The sheep arrived two days before the Government imposed a ban on the import of all livestock. They were slaughtered immediately on their arrival in Roscommon and passed for human consumption.
The Minister of State for Food, Mr Noel Davern, said on RTÉ radio this morning: "We are not happy with the answers we are getting, but we are happy that all the animals which arrived there have been slaughtered."
"There may be an investigation for fraud in this area. We have somebody who said they were entered in their name, we understand the cheque was paid in their name, but they say they have nothing to do with it."
The Dáil is holding a special sitting this afternoon to discuss the crisis.
The alarm was raised as 200 sheep at a farm at Meigh in south Armagh on the border were found to have been imported after being bought at a market in Carlisle.
The Northern Agriculture Minister Ms Bríd Rodgers said: "It is now our belief we are looking at an outbreak of this disease in Northern Ireland."
The Armagh flock was destroyed and incinerated while a livestock importer and dealer were being questioned on suspicion they breached animal movement regulations.
The Minister for Agriculture Mr Walsh announced an exclusion zone immediately south of the border in north Co Louth in which the movement of all animals will be prohibited.
The area will then be put under veterinary supervision.
Mr Walsh said he is arranging for the assistance of the Garda and Army in ensuring that movement restrictions are fully effective.
Mr Walsh said he was also attempting to enforce prohibition on the movement of all susceptible species for any purpose other than immediate slaughter.
He said he was also arranging the cancellation of all hunting, fishing, hill-walking and any activity which involves access to and passage across farmland.
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Operations by the Garda and the Army at 30 border checkpoints on the 240-mile border have been stepped up.
All livestock markets, horse and greyhound races and hunts have been cancelled throughout the state, along with most other sporting events.
The Taoiseach Mr Ahern said there was "huge concern" at Government level about the possible spread of the disease to the Republic.
He was speaking before his flight to London last night for talks with British Prime Minister Mr Tony Blair and to deliver an address today to the Welsh Assembly.
The British army has introduced "modified" patrolling along the border over fears soldiers could spread the disease.
PA