Police say two men from Aberystwyth and one from West Yorkshire have been arrested on suspicion of offences under the Fraud Act.

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A Dyfed-Powys Police spokesman said: "Dyfed-Powys Police have today made arrests at both meat plants inspected by the Food Standards Agency on Tuesday.

"At Farmbox Meats near Aberystwyth, Dyfed-Powys Police have arrested two men aged 64 years and 42 years, and in a simultaneous operation police arrested a man aged 63 at the Peter Boddy Slaughterhouse in Todmorden, West Yorkshire. [pictured]"

All three are being held at Aberystwyth police station where they will be interviewed jointly by police and FSA staff.

News of the arrests came as the Food Standards Authority (FSA) admitted that a scheme to control the sale of horsemeat had failed.

The FSA said on Thursday that hundreds of horse carcasses contaminated with the painkiller bute, which is banned from the human food chain, could potentially have been exported to the Continent and eaten. However it health authorities again stressed that the risk to human health remains negligible.

Speaking in the House of Commons, Agriculture Minister David Heath confirmed that - as reported by Channel 4 News on 24 January - the FSA found traces of bute in eight horse carcasses from UK abbatoirs, three of which may have entered the food chain in France.

The other two contaminated carcasses, which were slaughtered at High Peak Meat Exports in Cheshire, have been destroyed.

Horse passports

According to the British Horseracing Authority, since 2000 every thoroughbred registered in Britain has had a microchip enabling each and every horse to be identified. All racehorses are also issued with their own equine passport containing information including, where appropriate, their lack of suitability for consumption.

Food Standards Agency Chief Executive Catherine Brown said on Thursday that given these rules required both vet and horse owner to sign the horse passport if a horse was treated with bute, those rules must have been broken:

"If both these people have done the right thing, horses with bute in don't make their way into the food chain".

However Chief Medical Officer Dame Sally Davies stressed that although the drug was linked to side-effects in humans who took it, the risk was very low:

"If you ate 100 per cent 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.

Tests on Findus products for the presence of the horse painkiller bute have come back negative.

Following an emergency summit with EU counterparts in Brussels on Wednesday, the UK Environment Secretary Owen Paterson will today meet police at Europol headquarters to discuss the horsemeat contamination scandal.

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Consumers duped

The latest revelations came as a committee of MPs published a scathing report condemning what it called the "flat-footed" handling of the crisis by the government, and blaming cuts at the FSA for weakening its ability to respond.

The Commons Environment, Food and Rural Affairs Committee warned that findings to date are likely to be the tip of the iceberg, and concluded that:

"the strong indications that people have intentionally substituted horsemeat for beef leads us to conclude that British consumers have been cynically and systematically duped in pursuit of profit by elements within the food industry."

Asda withdraws products

On Thursday evening the Asda supermarket chain confirmed that, as a result of a preliminary test result suggesting the presence of horsemeat in a bolognese sauce, it was withdrawing four beef-based products from the same supplier: 500g beef bolognese sauce; 600g beef broth soup; 500g meat feast pasta sauce; 400g chili con carne soup.

Asda stressed that the withdrawal was precautionary and apologised to its customers.

Racehorses slaughtered

Separately it has been confirmed that the owner of an abbattoir under investigation by the FSA has a contract to remove fatally injured horses from the Grand National race at Aintree.

Owners of the racecourse in Liverpool said on Thursday they had a contract with Peter Boddy, whose slaughterhouse in West Yorkshire was raided by the FSA and police on Tuesday, to remove the carcasses of some horses put down during the world famous race. However Aintree's owners said they were confident that no unfit meat had entered the food chain:

"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."

"Aintree Racecourse follow these guidelines to the letter .. By the time these carcasses are returned to the disposal organisation's premises they are totally unsuitable for consumption."

Legal proceedings

Meanwhile, Farmbox Meats, the Welsh meat processing company also raided by the authorities on Tuesday, has said that it is applying for the Food Standards Agency (FSA) sanctions to be immediately overturned.

Farmbox, which closed pending the outcome of investigations into claims that it was involved in supplying and using horse carcasses in burgers and kebabs, says it has been falsely accused. The company has lodged papers with Aberystwyth magistrates court to appeal against the FSA sanctions.

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