Two meat plants were raided today under suspicion of passing off horse meat as beef for kebabs and burgers.
The Food Standards Agency (FSA) and police officers entered Peter Boddy slaughterhouse in Todmorden, West Yorkshire, and Farmbox Meats in Llandre in Aberystwyth, West Wales.
They have both been suspended pending the outcome of investigations into claims they supplied and used horse carcasses in meat products purporting to be beef.
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The FSA said it had "detained" all meat found at both premises and seized paperwork and customer lists from the two companies.
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."
Environment Secretary Owen Paterson said: "This is absolutely shocking. It's totally unacceptable if any business in the UK is defrauding the public by passing off horse meat as beef.
"I expect the full force of the law to be brought down on anyone involved in this kind of activity."
Mr Paterson today met representatives of supermarkets and food suppliers to discuss the growing scandal of horse meat mislabelled as beef.
Joining officials from the Food Standards Agency, he talked to 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.
The Environment Secretary will travel to Brussels tomorrow to discuss the scandal with counterparts in EU countries.
Supermarket giant Tesco yesterday became the latest retailer to drop a major supplier after discovering a range of spaghetti bolognese ready meals contained more than 60% horse meat.
It followed frozen food firm Findus and Aldi in finding the meat in products made by French firm Comigel and last night joined them in dropping the company as a supplier.
The raids today uncovered the first suspected instance of a UK abattoir passing off horse meat for beef, Mr Paterson confirmed to Sky News.
It came after the National Beef Association (NBA) yesterday suggested the addition of the words "United Kingdom origin" to packaging to prevent "further cheating" by suppliers on the Continent.
The scandal has spread all over Europe as details of the elaborate supply chain in the meat industry emerge.
French consumer safety authorities said companies from Romania, Cyprus and the Netherlands, as well as its own firms, were involved.
Romanian authorities confirmed they are investigating while their Dutch counterparts said they are ready to do so if necessary.
But Romanian prime minister Victor Ponta said yesterday his government had no evidence that any companies in Romania had broken any European laws.
The raids came as Waitrose announced it was pulling a range of beef meatballs after tests revealed they might contain pork.
A spokesman said that tests on the 480g packs of 16 frozen Essential Waitrose Meatballs had been contradictory but it was removing them from sale as a precaution.
"We have discovered that in two batches of our frozen meatballs produced last summer some of the meatballs may contain some pork," he said.
"Several tests have been done on this product and, even though the results have been contradictory, we have taken the precautionary action of removing the frozen meatballs from sale and putting up customer information notices in all our branches.
"The meatballs are safe to eat but pork is not listed as an ingredient and should not be part of the recipe."
Only 480g packs labelled as Best Before End June 2013 and August 2013 are affected, he added.
The Welsh Government minister for agriculture, Alun Davies, said: "Integrity and trust are essential in the food chain.
"I would be appalled if these allegations are proven.
"The Welsh Government is working closely with the Department for the Environment, Food and Rural Affairs (Defra) and the FSA to ensure this matter is dealt with swiftly and decisively."
Peter Boddy said he will co-operate with Food Standards Agency officers and said they had not "raided" his Todmorden premises.
He said: "It was not a raid - they are welcome to visit whenever they want, they just wanted to see my records which I will be showing them."
He added that he does slaughter horses at his plant and that the meat is sold in the UK.
One of Mr Boddy's company websites states he has been "involved in agriculture and the meat trade for over 50 years".
It says he runs a licensed slaughterhouse and a registered abattoir and is involved in the game and wholesale meat business.
Shadow environment secretary Mary Creagh said: "I welcome the action taken tonight by the FSA and the police. I'm glad the FSA has investigated the concerns about horse meat entering the food chain I first raised with ministers three weeks ago.
"It's right that action is being taken to deal with the criminals whose activities are damaging confidence in the UK food industry."