Bernard Matthews's company could face prosecution for safety breaches leading to Britain's first outbreak of bird flu, a government minister said yesterday.

Ben Bradshaw, the junior environment minister handling the crisis, accused the firm of a "biosecurity breach" at its farm in Holton, Suffolk, where 159,000 turkeys were slaughtered in an attempt to contain the disease last weekend. He added that "court action" could result.

The move comes as evidence emerges which, investigators believe, links the arrival of the deadly H5N1 virus on the farm to meat imported from the company's operations in Hungary - and as fears grow that infected meat may have reached supermarket shelves.

Mr Bradshaw told The Independent on Sunday that there had "clearly been a route of infection" at the farm, adding: "There has been a biosecurity breach, otherwise this infection would not have happened."

He said: "There is an ongoing investigation, and it is possible that Bernard Matthews Ltd will be prosecuted".

The company replied that it was co-operating fully with the investigation and that the question of a prosecution would depend on its outcome.

Investigators fear that, as the outbreak began on 24 January and the disease was not confirmed on the Holton farm until the beginning of February, there is a possibility that meat contaminated with the virus has gone on sale to the public.

Sainsbury's has already reported a 10 per cent fall in poultry sales since news of the outbreak was first reported, and the Food Standards Agency is considering whether to order a product recall.

The agency insists that turkey is safe, but flu experts caution that its assurances are too sweeping. They agree that cooking it properly will destroy the virus, but say that the public should be warned that there could be a risk in handling the meat beforehand.

Professor John Oxford, of Queen Mary's Medical School at London University - one of Britain's foremost authorities on flu - says that people should be advised to wash their hands in warm soapy water after touching the raw meat, and to clean all surfaces with disinfectant afterwards.

He added that eggs should be boiled for a full four minutes. Research published in this month's American Journal of Infection Control suggests that the virus can pass through the pores in egg shells.

The Tory environment spokesman, Peter Ainsworth, is calling on ministers to investigate local reports of unusually heavy movements of poultry in Suffolk before the outbreak was made public, leading to fears that local farmers might have been trying to pre-empt restrictions.

He said: "I can understand how some people might want to do this, but it would be entirely reprehensible."

Additional reporting by Roger Dobson