Sheffield City Council also announced it was suspending the use of processed meat in school meals as a precautionary measure as the Food Standards Agency revealed the latest results of its tests.
The moves follow the arrest yesterday of West Yorkshire slaughterhouse owner Peter Boddy on suspicion of fraud in connection with the supply of horsemeat, the Yorkshire Post understands.
Police confirmed a 63-year-old man had been arrested at the Todmorden abattoir last night.
Two further arrests were made at Welsh meat processing firm Farmbox Meats, which 63-year-old Mr Boddy’s firm allegedy supplied with horse carcasses.
The men arrested there were a 64-year-old, named by sources as owner Dafydd Raw-Rees, and a 43-year-old, believed to be plant manager Colin Patterson.
The three men were being questioned on suspicion of fraud by Dyfed-Powys Police and investigators from the Food Standards Agency (FSA) in Aberystwyth last night.
The arrests follow raids by the FSA on Tuesday, when operations at both premises were suspended amid claims they supplied and used horse carcasses in kebabs and burgers purporting to be beef.
Meat and paperwork, including customer lists, were seized from each company, the FSA said.
Mr Boddy, who it emerged yesterday is contracted to remove fatally injured horses from the Grand National, was unavailable for comment last night.
But he denied any wrongdoing on Tuesday and said he would cooperate with the FSA, who were “welcome to visit” his premises.
Aintree Racecourse in Liverpool confirmed yesterday it used Mr Boddy’s slaughterhouse as a “licensed disposal organisation” but added it was “confident” no unfit meat from racehorses put down by injection had illegally entered the food chain. A spokesman said: “Pro-active and considered measures are in place to prevent this, such as passport identification backed up by a sticker on the passport and close liaison with licensed disposal organisations.”
Meanwhile, cottage pie testing positive for horse meat was delivered to schools in Lancashire, it was confirmed today.
The county council said it has withdrawn the pre-prepared beef product from 47 school kitchens.
The announcement is the latest development in the scandal and comes as the Food Standards Agency (FSA) was releasing new details of its latest tests into horse meat in processed meals.
The FSA will report on the UK products after asking retailers and suppliers to provide “meaningful results” from tests to detect the presence of horse meat in processed meals labelled as beef.
Lancashire County Councillor Susie Charles, cabinet member for children and schools, said: “We share the concerns people have about what is clearly a major problem in food supplies across the UK and Europe.
“Because of those concerns we decided to seek extra assurance that our external suppliers were not providing any products containing horse meat DNA, and one of the products has returned a positive result.
“Relatively few schools in Lancashire use this particular product but our priority is to provide absolute assurance that meals contain what the label says - having discovered this one doesn’t, we have no hesitation in removing it from menus.
“This does not appear to be a food safety issue but I’ve no doubt parents will agree we need to take a very firm line with suppliers and it is a credit to our officers that we have been able to quickly identify the problem and take the product off the menus.”
The news from Lancashire came after officials said burgers containing horse meat had been supplied to hospitals in Northern Ireland.
David Bingham from the health service’s Business Services Organisation, which provides meat for the health trusts, said a range from a company in the Republic of Ireland had been withdrawn.
Northern Ireland’s agriculture minister Michelle O’Neill has called a special meeting on the horse meat crisis.
Ahead of the FSA test results announcement several major retailers said test results on processed meals have proven negative for horse meat.
Tesco, Sainsbury’s, Morrisons, Iceland, Marks and Spencer and the Co-op said no horse meat was found in their products.
Asda withdrew its 500g beef bolognese sauce from shelves yesterday after tests revealed the presence of horse DNA.
The company apologised to customers and said it was taking a “belt-and-braces approach” by removing a further three beef products made by the same supplier, the Greencore plant in Bristol, as a precaution.
Greencore said it was awaiting results of tests on sauce supplied to Asda to confirm the presence and extent of the equine DNA.
In a statement it said: “The sauce contained meat that was supplied to Greencore under contract by the ABP Food Group’s Nenagh plant in County Tipperary, Ireland, an approved and regularly audited supplier.
“The company is working closely with them to determine the full facts as we await the results of the further tests.”
It continued: “Greencore is committed to maintaining the highest standards of food safety and food traceability, and is therefore extremely concerned that the quality of one of its products may have been compromised in this way.
“The company is participating in full with the intensive industry testing programme to examine the full supply chain in order to restore consumer confidence.”
Bradford-based Morrisons rejected Downing Street claims that the company had not been active in the media.
Company spokesman Julian Bailey said his supermarket has so far done 68 tests - none of which returned positive results for horsemeat.
He said: “For us, it is right to talk to our customers. They are pretty concerned about the situation and we need to tell them what the latest is and reassure them where we have got it right.
“In our case, we have got 68 results in so far and all of them are negative for horsemeat contamination.
“So the testing programme is obviously the first part of this and then it’s going to be a case of learning the lessons in terms of how we deal with suppliers.
“In our case, we make much of our own food and in the case of fresh meat we have our own abbattoirs - that provides us with a certain level of assurance.”
Mr Bailey said longer supply chains meant higher levels of risk, regardless of whether the final seller was a supermarket, retailer or school.
And he insisted Morrison would not be “complacent” over its own products - with more than 200 tests planned.
“We have got quite a way to go yet,” he added.