Tests on its frozen Everyday Value Spaghetti Bolognese, which was withdrawn last week as a precaution, showed some had high levels of contamination, it said.
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 announcement came as Shadow Environment Secretary Mary Creagh said clear evidence of an illegal trade of horses from Ireland to the UK for meat had been uncovered.
She said there were 70,000 horses unaccounted for in Northern Ireland, with unwanted animals given false paperwork before being sold for 10 euros (£8) and then resold to dealers for meat for up to 500 euros (£423).
Speaking in the Commons yesterday, the Wakefield Labour MP said: “The Ulster Society for the Prevention of Cruelty to Animals have clear evidence of an illegal trade of unfit horses from Ireland to the UK for meat, with horses being re-passported to meet demands for horsemeat in mainland Europe. It is very convenient to blame the Poles and the Romanians but so far neither country have found any problems with their beef abattoirs.”
She was speaking after a statement from Environment Secretary Owen Paterson in which he said “criminal activity” had been at the heart of the scandal.
“At the moment this appears to be an issue of fraud and mis-labelling, but if anything suggests the need for changes to surveillance and enforcement in the UK we will not hesitate to make those changes,” he said.
Mr Paterson told MPs there would be immediate testing of products across the supply chain, including tests at schools, hospitals and prisons.
The “ultimate source” of the problem was not yet known but agencies were investigating a supply network that stretched across Europe, he said.
French consumer safety authorities have said companies from Romania, Cyprus and the Netherlands as well as its own firms were involved. Romanian authorities said they are investigating while their Dutch counterparts said they would do so if necessary.
One theory for the apparent increase in the presence of horse meat in the food chain is new restrictions on using horses on roads in Romania, which have led to a surge in numbers of animals being put down.
But Romanian prime minister Victor Ponta said yesterday his government had no evidence that any companies in Romania had broken any European laws.
Tesco last night followed frozen food firm Findus and discount retailer Aldi in dropping French firm Comigel as a supplier after discovering a range of spaghetti bolognese ready meals contained more than 60 per cent horse- meat.
The supermarket said tests on its frozen Everyday Value Spaghetti Bolognese, withdrawn last week as a precaution, showed some had high levels of contamination.
The revelation forced the company to issue its second apology in as many months after earlier tests discovered traces of horse in burgers from an Irish supplier.
Findus, which has taken its beef lasagne made by Comigel off shelves after some were found to contain up to 100 per cent horse meat, said it was considering taking legal action against the suppliers as an internal investigation “strongly suggests” the contamination “was not accidental”.
The National Beef Association (NBA) has called for more precise labelling of products that would add the words “United Kingdom origin” to packaging to prevent “further cheating” by suppliers.
Meanwhile, butchers have reported a marked spike in trade as consumers turn their backs on imported and processed goods.
Yorkshire butcher Brindon Addy, chairman of the Q Guild, which represents 130 butchers across England, Scotland and Wales, said some members were reporting trade had surged by 20 and 30 per cent in recent weeks.
“People slip into the convenience of supermarket shopping, but whenever there is a scare – be it horsemeat or BSE – they always come back,” he said.