Government scientists have confirmed the presence of infectious salmon anaemia on eight farms. It is the first large-scale disease outbreak to hit the growing industry, which has an annual turnover of pounds 300m and employs 6,000 people.
Under animal health regulations, the affected farms have been ordered to kill all their fish and leave their cages and tanks empty for at least six months, a heavy blow for an industry whose crop takes three years to reach maturity.
Across the infected farms, workers have faced the daunting task of killing three million young salmon and 1,500 tons of more mature fish, by slitting their gills after they have been stunned with carbon dioxide.
The disease is highly infectious, and although it is not harmful to humans, it kills salmon through a combination of internal bleeding and stress, which shuts down their immune systems.
A Scottish Office report on whether the infected farms alerted the authorities quickly enough under animal health regulations has been sent to the Procurator Fiscal, who will decide whether to launch prosecutions.
Staff of the Norwegian farming company at the centre of the outbreak have been interviewed under caution and have also been questioned about the possible illegal importation of infected fish from Norway, where the disease has been endemic since the 1980s.
Ken Fraser, company secretary for Hydro Seafood GSP, told the Independent on Sunday: "We have co-operated with the investigation. On every occasion in which we have been asked, we have co-operated as far as possible."
The disease was first discovered on a Hydro farm on Loch Nevis, near Mallaig, in May. Since then, it has spread to farms in Shetland, Skye, and Loch Creran, near Oban. All infected farms have been told to kill their entire stocks of fish.
Scientists are also checking suspicions that another nine farms, including sites on Shetland, Mull, and the Isle of Kerrera, have been affected.
The costs to the industry have been crippling. It has already lost pounds 8m, and if fears that the disease has spread are confirmed, losses could reach pounds 15m this year.
These losses could lead to permanent farm closures, because there is no government compensation available for fish farmers exterminating their stock - the subject of urgent consultations between the Scottish Office and the Scottish Salmon Growers' Association.
Chief executive William Crow said: "There has been a lot of fear. This is new to us. We would like to work with the Government to develop an insurance policy that would cope with future outbreaks."
He stressed the industry's importance to the fragile economy of the Scottish Highlands, where it employs 2,500 of its work-force in remote areas. Last week, Hydro Seafoods GSP laid off 150 workers based near Oban, putting part of the blame on the epidemic.