The slaughter of thousands of turkeys on a farm in England infected with the potentially deadly H5N1 strain of bird flu was being completed last night, as scientists are trying to discover the source of the virus.
There were immediate concerns the outbreak may dent sales of poultry, although health officials have said there was no evidence anywhere in the world of the disease being picked up through food.
Although 164 people have died from H5N1 since January 2003, mostly in Asia and the Middle East, the British health protection agency has reassured the public it is only transmitted through direct contact with poultry.
Industry figures in Britain have urged consumers to heed advice from the department of environment, food and rural affairs (Defra) which said no infected birds had entered the food chain.
Charles Bourne, chairman of the national farmers' union (NFU) poultry board, said: "There is the likelihood that there could be an effect on sales and that is really what is going to hit me.
"If chicken sales drop by 5 per cent, that means we produce 16 million chickens a week in this country and some 500,000 are not wanted.
"That will affect the market and prices will go down. Of course we are concerned."
But the major supermarkets yesterday reassured customers their poultry and egg products were safe and supplies were unaffected.
Meanwhile, officials said the risk posed to humans by the highly pathogenic Asian version of avian flu found on a Bernard Matthews farm at Holton, near Halesworth, Suffolk, is "negligible".
However, the British government is preparing "very seriously" for the remote possibility the disease - which can be transmitted to humans - could mutate into a form which causes a flu pandemic.
Health secretary Patricia Hewitt said: "We are preparing very, very seriously and thoroughly for the possibility of a pandemic flu." She added: "It is a very remote risk but if it did happen it could be very serious indeed."
The department of health has stockpiled enough Tamiflu anti-virals to cover a quarter of the British population, as advised by scientists, and conducted a massive preparatory exercise last week, Ms Hewitt told ITV1's The Sunday Edition.
The investigation to track down how the disease had entered the poultry flock is ongoing, with experts examining whether there is another origin of the avian flu in poultry, or if it came from wild birds.
Deputy chief veterinary officer Fred Landeg said only one of the 22 turkey houses on the farm in Holton appeared to have been affected, but all 159,000 birds were being culled as a precaution. The animals had come from a hatchery in the UK, none had been moved off the farm and early indications were that this was a "recent introduction of disease", he said. The first birds died on Tuesday.
A restricted area of more than 800 square miles has been set up. In this area poultry must be kept indoors, isolated from wild birds and movements must be licensed. - ( PA )