Those guilty of passing off horsemeat as beef are being threatened with the "full force of the law" after two British processing plants were shut down following raids.
The warning came from Environment Secretary Owen Paterson, who is in Brussels for a summit of EU leaders on the widening scandal.
The European Commission is now urging governments to carry out DNA tests on processed beef to check for contamination by horsemeat, starting in March.
There should also be tests for the presence of the veterinary painkiller known as "bute", which is causes cancer in humans and is banned from the food chain, European health commissioner Tonio Borg said.
The problem was being treated as a fraud issue rather than one of food safety, he said.
Earlier the Food Standards Agency (FSA) and police swooped on a slaughterhouse and a meat manufacturer after apparently uncovering "a blatant misleading of consumers".
Peter Boddy slaughterhouse in Todmorden, West Yorkshire, and meat processing plant Farmbox Meats in Llandre near Aberystwyth, West Wales, had records seized and have been temporarily closed. The firms' owners deny any wrongdoing.
At Farmbox Meats, Sky News saw large crates of meat - some covered by tarpaulin and others open - left in outdoor areas during the night, before they were removed this morning.
Its owner, Dafydd Ffredric Raw-Rees, told Sky News no meat had been seized and said the plant was operating as normal. The FSA later confirmed it should not be.
Slaughterhouse owner Peter Boddy said he would co-operate with FSA officers.
The FSA, which is investigating claims the firms supplied and used horse carcasses in burgers and kebabs, says it has "detained" all meat found at both premises and seized paperwork.
Mr Paterson said: "It's totally unacceptable if any business in the UK is defrauding the public by passing off horsemeat as beef.
"I expect the full force of the law to be brought down on anyone involved in this kind of activity."
David Cameron, speaking at PMQs, described the situation as "appalling" and "completely unacceptable".
"If there has been criminal activity, there should be the full intervention of the law," the Prime Minister said.
Until now, meat linked to the scandal had been thought to have come from suppliers in continental Europe, but for the first time it appears the contamination may also come from British premises.
Andrew Rhodes, FSA director of operations, said: "I ordered an audit of all horse producing abattoirs in the UK after this issue first arose last month and I was shocked to uncover what appears to be a blatant misleading of consumers.
"I have suspended both plants immediately while our investigations continue."
Mr Paterson has met representatives of the Institute of Grocery Distribution, which represents food retailers and suppliers, to discuss plans for a new regime of quarterly testing of products.
Results of tests into the extent of contamination of beef products are expected on Friday.
Meanwhile, Waitrose announced it has withdrawn its beef Essential British Frozen Meatballs after pork was found in two batches. The supermarket said they were made at the ABP Foods-owned Freshlink factory in Glasgow last summer.
Morrisons chief executive Dalton Philips has told Sky's Jeff Randall the chain could not be 100% sure about the content of all of its beef products either, but he said its checks are rigorous and it has "extremely high" confidence.
As the scandal widens in Europe, Norway has pulled imported Findus beef products thought to contain horsemeat from shelves.
Ministers from the worst-affected EU nations were meeting in Brussels to discuss their response to the scandal, which erupted after tests in Ireland (OTC BB: IRLD - news) showed products labelled as beef contained up to 100% horsemeat.
Concerns have been raised that horsemeat sometimes contains the painkiller bute, which causes cancer in humans and is banned from the human food chain.
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