Some 50,000 tonnes of meat supplied by two Dutch trading companies and sold as beef across Europe since January 2011 may have contained horsemeat.
The meat is being recalled where possible, the Dutch authorities say.
There was no evidence that the meat was a threat to human health, the Netherlands Food and Consumer Product Safety Authority said.
In total, 132 companies in the Netherlands and some 370 more around Europe are affected by the discovery.
The suspect meat was supplied by Wiljo Import en Export BV and Vleesgroothandel Willy Selten.
The two companies are owned by one man who has already previously been investigated by food safety officials, the BBC's Matthew Price reports.
The latest find was made as part of EU-wide tests to trace horse DNA in processed beef foods and to detect a veterinary drug used on horses.
The results of the rest of the tests conducted across the EU will be made public next week - giving consumers a better idea of how widespread the scandal has been.
The Dutch decided to release their results early because of the magnitude of what they had discovered, our correspondent says.
'Already consumed'The recall covers meat dating back to 1 January 2011 up until 15 February this year, the Dutch food authority said on Wednesday.
Continue reading the main storyAnalysis
With its imposing grey gates, the Willy Selten factory in Oss does not receive many visitors outside the meat trade. That was according to the owner, whom we met on a chilly Saturday afternoon in February. Investigations into the Netherlands' role in the Europe-wide horsemeat scandal had brought us here.
The suspicion is now that it was here, behind the corrugated shutters, that horsemeat was relabelled and sold on as beef. The Dutch Food Safety Authority offered Willy Selten an ultimatum: "Trace the origins of your meat or we will take over."
On Wednesday morning an urgent recall message was sent out to 502 companies across Europe - a "rapid alert" to locate all of the products that may have been contaminated. Willy Selten has been under strict supervision ever since the initial suspicions emerged in February.
It may be a surprise to many to learn that the factory is still operating, though reports in the Dutch media claim it is facing bankruptcy. A Food Safety Authority spokeswoman explained: "Our policy in the Netherlands is that everybody should be given a second chance."
Due to the lapse of time, a lot of the meat "may already have been consumed", it added.
Inspectors examining the records of the Dutch trading companies found that the origin of the supplied meat was unclear. As a result it was not possible to confirm whether slaughterhouses had respected procedures.
Some of the suspect meat was also exported to Germany, France and Spain, where authorities have been alerted. The British Food Standards Agency has confirmed that a small number of UK companies may have received products from the Dutch wholesalers.
"It might contain traces of horsemeat, but we don't know for certain at the moment if this is the case," said Esther Filon, a spokeswoman for the Dutch food authority.
"The buyers have probably already processed the meat and sold it on. They, in turn, are obliged to inform their own customers."
New EU lawAll EU member states have been informed of the Dutch discovery, EU spokesman Frederic Vincent told the BBC.
They have been urged to check whether or not processed meat products coming from the plants in question were still on the market, he added.
"The Dutch announcement is a consequence of the investigations which were launched by EU member states a few weeks ago," the EU spokesman said.
"Given the size of the fraud, the Dutch decided to go public with their discovery."
Traces of horsemeat have been found in numerous processed beef frozen meals across Europe.
In February, Dutch officials raided a meat processing plant suspected of mislabelling beef and ordered the withdrawal of suspicious products from supermarket shelves.
Other countries affected included the UK, the Republic of Ireland, France, Switzerland, Sweden and Germany.
The EU is set to adopt an Animal and Plant Health legislative proposal in the coming weeks, which includes clauses designed to tackle food fraud.
Source: http://www.bbc.co.uk/news/world-europe-22098763#sa-ns_mchannel=rss&ns_source=PublicRSS20-sa
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