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Britain's Food Standards Agency (FSA) said criminal activity was likely to blame as consumers grappled with an escalating horsemeat scandal that Prime Minister David Cameron called "completely unacceptable".
Food company Findus tested 18 of its frozen beef lasagne products from its French supplier Comigel and found 11 meals containing between 60 percent and 100 percent horsemeat, the FSA said.
The lasagnes were produced in Luxembourg, where veterinary authorities said the meat used had been imported from France where it had been "fraudulently labelled" as beef.
In France, Findus said it was withdrawing three products -- lasagne, shepherd's pie and moussaka -- from the shelves after significant quantities of horsemeat were found in its lasagne dishes in Britain.
In Britain, FSA director of operations Andrew Rhodes said the situation was caused by either gross negligence or criminal activity.
He stressed there was no evidence that the products posed a risk to public health.
"We are testing a very broad range of products, including those that go to schools and hospitals," Rhodes told BBC radio.
"We are demanding that all the manufacturers, all the retailers, test all of their products to rule out any further contamination.
"I can't speculate on what we might find."
Speaking in Brussels after a European Union summit, Cameron said the situation was "very shocking".
"It is completely unacceptable," he told reporters.
"People will be very angry to find out they have been eating horse when they thought they were eating beef.
"This isn't really about food safety -- it's about effective food labelling. It's about proper retail practice.
The FSA said it had ordered further tests on the suspect lasagne for the veterinary drug phenylbutazone, which can cause a serious blood disorder to humans in rare cases.
It is the latest horsemeat-related scare after equine DNA was found two weeks ago in beefburgers in Britain and Ireland, countries where horsemeat consumption is generally taboo.
Millions of beefburgers have been removed from sale.
Comigel has its administrative headquarters in Metz in northeastern France but its production centres are in Luxembourg.
The firm said it had withdrawn all products from a meat supplier that had provided it with horsemeat instead of beef, but insisted veterinary services in France and Luxembourg had said the horsemeat in question "does not raise any public health issue".
The company supplies frozen meals to supermarket chains and other clients in 16 countries, with Germany, the Netherlands, Belgium and Scandinavia the main markets and Findus among the brands it has contracts with.
"All steps are being taken to prevent the re-occurrence of such an issue," it said.
Luxembourg company Tavola, which makes the products, imported the meat from France but it was "fraudulently labelled" beef, the country's director of veterinary services Felix Wildschutz told AFP.
A spokesman for Sweden-based Findus's operations in Britain told AFP that Comigel has supplied them with beef lasagne since 2011.
He said they were sold in Tesco, ASDA and Morrisons, three of Britain's so-called "big four" supermarket chains.
Findus has asked all its suppliers to provide certification about exactly what meat is in their products since the beefburgers scandal broke, the spokesman said.
Comigel expressed doubts about the lasagne at the weekend and the product was withdrawn on Monday in Britain pending the tests.
Two weeks ago, the Food Safety Authority of Ireland had revealed that up to 29 percent of the meat in some frozen beefburgers was in fact horse, while they also found pig DNA. They were on sale in major supermarket chains.