Tesco has revealed tonight that some of its frozen Everyday Value Spaghetti Bolognese contains more than 60 per cent horsemeat.
The ready meal, made by Comigel, was withdrawn from sale on Tuesday.
Tesco announced it was becoming the latest retailer and manufacturer to drop the beleaguered firm in the wake of the contamination.
Tim Smith, Tesco's group technical director, said: "We did this as a precaution because Findus products from the same factory were reportedly at risk of containing horsemeat.
"Since then, we have carried out a number of tests on the product and those tests identified the presence of horse DNA.
Of the positive results, most are at a trace level of less than 1% but three showed significant levels of horse DNA, exceeding 60%.
"We have carried out further tests to ensure that there is no danger to health through the presence of potentially harmful bute. The test for bute was clear.
"The frozen Everyday Value Spaghetti Bolognese should contain only Irish beef from our approved suppliers.
"The source of the horsemeat is still under investigation by the relevant authorities. The level of contamination suggests that Comigel was not following the appropriate production process for our Tesco product and we will not take food from their facility again.
"We are very sorry that we have let customers down. We set ourselves high standards for the food we sell and we have had two cases in recent weeks where we have not met those standards.
The focus of the "extensive" horse meat scandal shifted towards luxury ready meals today, while in France fraud agents reportedly raided two food processing plants.
Officers from the French fraud office are said to have visited the Comigel and Spanghero factories which are believed to have been the source of much of the horsemeat being sold as beef across Europe.
The Comigel plant was first implicated in the scandal when the Swedish food company Findus withdrew beef lasagnes made in the factory amid concerns over the meat used in the product.
Although the scandal has mainly centred on low value, “economy” meals so far, it was today revealed that horsemeat could have made its way into more expensive products.
The Times today quoted a Food Standards Agency spokesman as saying “The focus is on products most likely to be contaminated. We’ll now be looking at upper, high value products.”
The news that the FSA will begin analysing luxury products for contamination came as the Environment Secretary rejected calls for a ban on imported meat products, despite admitting the chances of an "extensive" criminal conspiracy being behind the scandal were high.
Romania today hit back at French allegations that two abattoirs were the source of the horsemeat scandal.
Prime Minister Victor Ponta said there had been no breach of rules and standards.
"The data we have right now do not indicate any violation of European rules by Romanian companies or companies operating in Romania,” he said. “I do not believe that Romania, while being transparent and observing all standards, can and should accept being the usual suspect."
Owen Patterson said legal action over the horse meat scandal is likely to begin in Europe imminently and described the contamination of beef products as a case of fraud against the public.
Mr Paterson said the scandal appeared to be “extensive” across Europe but he repeated his rejection of calls for a ban on meat imports, saying that FSA advice was that all products on sale are safe for consumption.
“This is a case of fraud and a conspiracy against the public, this is a criminal action, substituting one material for another,” he told BBC Breakfast in answer to questioning about calls for a ban on meat imports.
“If a British consumer goes into a retail store and buys a beef product, they should expect to get beef in that product, not horse.
“So this is a straight case of fraud and I think you will see legal actions beginning in certain continental countries today.
“I will be taking it up with certain ministers and also with the Commission in Europe, because this is overall a European Commission competence.
“It is absolutely unacceptable that consumers are being passed off with one product when they buy another.”
Over the weekend it emerged that some of the horsemeat being sold as beef on European market could in fact turn out to be donkey.
Food industry officials in France speculated that a law banning horses and donkeys from Romanian roads led to the slaughter of thousands of healthy animals.
These creatures are widely seen to be the source of much of the horsemeat originating in Romania being sold as beef in the European market.
It was suggested that donkey meat was just as likely to have ended up in the food chain as horsemeat.
Owen Paterson will address the House of Commons later today updating MPs on the scandal.
Earlier, asked about his prediction that there could be more bad news to come after the next set of test results has been completed, Mr Paterson said: “It looks as if this conspiracy, criminal conspiracy, criminal action, whatever you want to call it, may be extensive.
“I understand the plant in Luxembourg has had to issue warnings to customers in 16 different countries.”
Mr Paterson's remarks come as he is due to update MPs today on the scandal.
Mr Paterson added: “The FSA's clear advice is to continue buying and eating all the products for sale. Should evidence come forward of any serious threat to health obviously we will react very swiftly, and that could mean action on imports.
”But at the moment, all the evidence is that these products are entirely safe and people are open to eat them if they are advised so by the FSA - and they are.“
Asked how widespread he believed the scandal was, given that he was warning of possibly more bad news, Mr Paterson replied: “I honestly don't know. Reports today we have had from France looks as though it might have been pinned down to two abattoirs in Romania but I will be talking to authorities later in the day to establish that.
“I very much hope that these legal processes do flush out the criminals because it is completely unacceptable that British consumers should be sold a product marked as one thing which actually contains something else.”
Mr Paterson said yesterday that the Government was powerless to impose a ban on meat imports unless beef contaminated with horse meat is found to be a health risk.
He spoke after the chair of the Environment, Food and Rural Affairs select committee backed a ban on meat imports and urged the public to buy their meat locally.
Conservative MP Anne McIntosh said: “I believe there should be a moratorium on the movement of all meat until such time as we can trace the source of contamination.”
The Government's Chief Medical Officer (CMO), Professor Dame Sally Davies, said: “We are working closely with the FSA and Defra to investigate how horse meat got into the UK food chain.
“There is nothing to suggest a safety risk to consumers who may have eaten the products. All of the retailers involved so far have removed potentially affected products from their shelves.
“Phenylbutazone is used in some people who suffer from ankylosing spondylitis, a type of arthritis. However, there are international checks to prevent phenylbutazone from entering the food chain because there is a low risk of serious effects - such as aplastic anaemia - in some people.
“As such, it presents a limited public health risk and CMO supports the FSA advice that it should be excluded from the food chain.
“There is currently no indication that phenylbutazone - bute - is present in any of the products that have been identified in this country, but the FSA has ordered further tests to confirm this.
“It's understandable that people will be concerned, but it is important to emphasise that, even if bute is found to be present at low levels, there is a very low risk indeed that it would cause any harm to health.”