Some of the horsemeat has been sold to the public
Lancashire County Council has found 100kg of horsemeat in beef from Hungary with 40kg of it already sold to the public.
The meat was imported by Hungarian Food Ltd in Preston and sold on its market stall in the town and a shop in Liverpool called Taste of Hungary, the Food Standards Agency (FSA) said.
It said the horse flesh was being sold in 1kg bags labelled as "diced beef". The remaining unsold meat has been withdrawn from sale.
A FSA spokesman said the European Commission and the Hungarian authorities had been informed and the meat will be tested for the veterinary drug bute as part of the council's investigations.