FSA chief executive Catherine Brown spoke as it was revealed authorities in Britain and France are trying to trace the carcasses of six horses contaminated with the painkiller, which were slaughtered in a UK abattoir and may have entered the human food chain across the Channel.
The drug, which is potentially harmful to human health, was detected in eight horses out of 206 tested by the Food Standards Agency in the first week of this month. Two were intercepted and destroyed before leaving the slaughterhouse but the other six were sent to France, where horse meat is commonly eaten.
Ms Brown told a press conference at Defra headquarters that FSA had increased testing of horse carcasses over a three-month period last year after intelligence from abbatoirs suggested bute was getting into the food chain.
Of 63 tested - amounting to 5% of all carcasses - four (6%) of them tested positive for the painkiller, prompting it to start testing 100% of horse meat in January, which revealed the eight contaminated carcasses.
"That would say there has been a significant amount of carcasses with bute in going into the food chain for some time," she said.
Meanwhile, tests on Findus processed beef products withdrawn from sale in the UK after the discovery of traces of horse meat found no evidence of phenylbutazone - or "bute" - which is banned from products intended for human consumption.
Chief Medical Officer Dame Sally Davies said that although the drug was linked to side-effects in patients who have been taking it as a medicine for arthritis, the risk was very low.
"If you ate 100% horse burgers of 250g, you would have to eat, in one day, more than 500 or 600 to get to a human dose," she said.
"It would really be difficult to get up to a human dose."
The highest level of bute found in tests was 1.9 milligrammes per kilo of meat, she said.
Ms Brown said the agency had upped its testing for bute after intelligence work raised concerns in the spring of last year. In three months last year, 63 carcasses were checked, with four testing positive.
Labs have since developed a test producing results within 48 hours, allowing the FSA to test all carcasses since January this year "partly to get to the bottom of what was going on and partly to act as a deterrent".
Ms Brown said both vets and horse owners have to sign horse passports if an animal is treated with bute, to ensure it is not subsequently sold on for human consumption.
"If both these people have done the right thing, horses with bute in don't make their way into the food chain," she said.
"Someone has always broken the rules."
The six bute-contaminated horses which were sent to France had been slaughtered by LJ Potter Partners at Stillman's (Somerset) Ltd in Taunton, Somerset, said the FSA. The remaining two, slaughtered at High Peak Meat Exports Ltd in Nantwich, Cheshire, did not leave the slaughterhouse and have been destroyed.
Announcing the results of the bute tests in the House of Commons, agriculture minister David Heath said that the FSA was working with French authorities in an attempt to recall the contaminated meat from the food chain.
Mr Heath said the Government had instigated the "biggest investigation ever" into criminal activity in Europe over horsemeat contamination of beef products.
He told the Commons that retailers and suppliers would provide "meaningful results" by tomorrow from tests to detect the presence of horsemeat in processed meals labelled as beef.
But shadow environment secretary Mary Creagh accused the Government of "catastrophic complacency" over the danger of bute entering the human food chain.
Reminding Mr Heath that she raised the issue with him in the Commons last month, Ms Creagh said she was "astonished" to learn that contaminated horsemeat may have been sent to France for human consumption.
"We must make sure horsemeat intended for humans is not contaminated with bute, it really is as simple as that," said Ms Creagh.
"Why did you not act immediately when I raised this issue three weeks ago in this House?"
Prime Minister David Cameron's official spokesman said: "Bute should not be present in horses that go into the food chain. It is incredibly important that we get to the bottom of what is happening.
"My understanding is that we are working very closely with French authorities on tracing the three carcasses involved that went to France. We are doing that as a matter of urgency with the French authorities."
EU ministers agreed at an emergency summit in Brussels last night to the random testing of meat products across Europe for both horse DNA and bute.
But a parliamentary report today condemned the Government for its "flat-footed" handling of the scandal, warning that its ability to respond has been weakened by cuts at the FSA.
The Commons Environment, Food and Rural Affairs Committee said the public appeared to have been "cynically and systematically duped" for financial gain by elements of the food industry - raising wider concerns about the safety of the contaminated products.
"It seems improbable that individuals prepared to pass horsemeat off as beef illegally are applying the high hygiene standards rightly required in the food production industry," it said.
"We recommend that the Government and FSA undertake a broader spectrum of testing for products found to have the highest levels of contamination ... to provide assurances that there is no other non-bovine DNA or any other substances that could be harmful to human health present."
Committee chairman Anne McIntosh described the scale of the contamination in the food chain as "breathtaking" and warned that restoring consumer confidence would take time and money.
"The Government has a role to secure the correct balance between affordable food prices and effective regulations that require transparency and quality," she said.
"The consumer cannot be left to face a Catch-22 where they can either pay for food that complies with the highest standards of traceability, labelling and testing or accept that they cannot trust the provenance and composition of the foods they eat."
Meanwhile, a processing factory in Co Monaghan in the Republic of Ireland withdrew some batches of burger products produced for the UK market, some of which tested positive in the UK for 5% to 30% horse meat.
Rangeland Foods said the burgers, which contained beef supplied from Poland, date back to production in September and were specifically produced for the UK market and made to a specification for EU beef from EU-approved suppliers.
"Rangeland Foods has since taken the decision to withdraw all of their hitherto untested produce made from meat of Polish origin from the food chain, and that process is under way," said the company.
Production recommenced at Rangeland today after the go-ahead from the Department of Agriculture on the basis that it is using only Irish raw materials.
Rangeland was found earlier this month to have a second separate consignment of meat sourced in Poland which tested positive for horse. The DNA sampling showed it was 75% equine but none of it had entered the food chain.
Ms Brown was asked whether it would be fair to assume that 6% of the 9,000 horse carcasses she said were exported from Britain every year - which amounts to 540 animals - contained bute.
She replied: "That seems as reasonable a basis for making an estimate as any other."
Asked about the risk of a ban on British exports, she added: "There hasn't been any suggestion I have heard at any time on a ban on the export of British horse meat and of course there would be no reason to.
"We are the first country to be able to introduce the 'positive release' system and what is very encouraging is that Europe is now going to test 2,500 EU carcasses but also 1,500 third party imported carcasses.
"It wouldn't be surprising to see similar levels in other places."