Meat being stored at a factory in Northern Ireland has been found to contain 80% horsemeat, the Food Standards Agency (FSA) has said.
The meat tested at Freeza Meats in Newry was potentially linked to the Silvercrest factory in Ireland, which has been at the centre of the horsemeat burgers scandal.
The FSA NI statement said: "Of the 12 samples from the suspect consignment that have been tested, two of the samples came back positive for horsemeat, at around 80%.
"The investigation into the traceability of these raw materials and their source is under way."
It stressed that the meat had not yet entered the food chain.
Tesco and a number of other supermarkets removed certain brands of beef burgers from its shelves after they were found to contain horse meat last month.
Experts from Britain's Food Standards Agency (FSA) told the Commons Environment Committee they could not be sure if contaminated burgers were being sold for more than a year.
At least 10 million burgers were put into storage to be dumped following the debacle.
Controversy and concerns about traceability of food deepened at the weekend when halal food supplied to prisons by a Northern Irish-based company was found to contain traces of pork DNA.
In response to the scandals the FSA has announced that the results of tests on meat destined for UK shelves will be made public, to "provide a clearer picture of standards".
David Heath, the food and farming minister, said: "This is a shared problem, and it needs shared solutions.
"Food businesses' agreement to give regular updates on meat testing is a significant move that will give consumers confidence in what they're buying.
"It's now important that the industry starts sharing this information as soon as possible."
In Ireland, two processing plants have tested positive for equine DNA.
Police were called in after the Rangeland Foods factory in Co Monaghan was shut down when a sample tested positive with a reading of 75% horse DNA in raw ingredient.
The ABP Food Group, owned by Larry Goodman, has lost contracts worth an estimated 45m euros (£38m) with Tesco, Aldi, the Co-Operative Group and Burger King over the fiasco.
ABP's plant, Silvercrest, also in Co Monaghan, was found to have been supplying contaminated products.
Irish Taoiseach Enda Kenny has pledged to resolve the horse meat crisis as Ireland's fraud squad has been called in to help agriculture authorities track down the source of mislabelled meat.
Mr Kenny said: "This is a matter of reputation, obviously we cannot afford to have that. It is a matter that needs to be sorted out and will be sorted out."
In a statement, the department of agriculture said production had been suspended at Rangeland, a frozen burger supplier established in 1892 with a turnover of 18m euros (£15m) and about 80 staff.
"The company has indicated that none of this product has entered the food chain," the department said.
Committee chairman Andrew Doyle said: "Our committee has followed this story with deep concern. Ireland's enviable reputation in producing green, clean and traceable food, so critical to the prosperity of our euro 10 billion (£8.5bn) agri-food industry, risks being undermined when issues like this arise."