Horsemeat weighing 100kg (220lb) and falsely labelled as beef has been identified by council officials, with 40kg of it already sold to the public.

The meat was imported by Hungarian Food Ltd in Preston, Lancashire, and sold on its market stall in the town and a shop in Liverpool called Taste of Hungary, the Food Standards Agency has said.

It said the discovery of the horse flesh, being sold in 1kg bags and labelled as “diced beef”, was made by Lancashire county council.

The remaining unsold meat has been withdrawn from sale.

An FSA spokesman said: “The Food Standards Agency has notified the European commission and the Hungarian authorities. The local authority is investigating and the meat will be tested for the veterinary drug bute.”