Tesco has revealed that some of its frozen Everyday Value Spaghetti Bolognese contains more than 60 per cent horsemeat.
The ready meal, made by Comigel, was withdrawn from sale.
Tesco announced it was becoming the latest retailer and manufacturer to drop the beleaguered firm in the wake of the contamination.
Tim Smith, Tesco's group technical director, said: "We did this as a precaution because Findus products from the same factory were reportedly at risk of containing horsemeat. Since then, we have carried out a number of tests on the product and those tests identified the presence of horse DNA.
Of the positive results, most are at a trace level of less than 1 per cent but three showed significant levels of horse DNA, exceeding 60 per cent.
"We have carried out further tests to ensure that there is no danger to health through the presence of potentially harmful [analgesic drug] bute. The test for bute was clear.
"The frozen Everyday Value Spaghetti Bolognese should contain only Irish beef from our approved suppliers.
"The source of the horsemeat is still under investigation by the relevant authorities. The level of contamination suggests that Comigel was not following the appropriate production process for our Tesco product and we will not take food from their facility again. We are very sorry that we have let customers down."
The focus of the "extensive" horse meat scandal shifted towards luxury ready meals yesterday, while in France fraud agents reportedly raided two food processing plants.
Officers from the French fraud office are said to have visited the Comigel and Spanghero factories, which are believed to have been the source of much of the horsemeat being sold as beef across Europe.
The Comigel plant was first implicated in the scandal when the Swedish food company Findus withdrew beef lasagnes made in the factory amid concerns over the meat used in the product.
The scandal has mainly centred on low value, "economy" meals so far, but it was yesterday revealed horsemeat could have made its way into more expensive products.
The Times quoted a Food Standards Agency official as saying: "The focus is on products most likely to be contaminated. We'll now be looking at upper, high value products."
UK Environment Secretary Owen Paterson rejected calls for a ban on imported meat products, despite admitting the chances of an "extensive" criminal conspiracy were high.
Romania yesterday hit back at French allegations that two abattoirs were the source of the horsemeat scandal.
Prime Minister Victor Ponta said there had been no breach of rules and standards. "The data we have right now do not indicate any violation of European rules by ... companies operating in Romania."
Paterson said the scandal appeared to be "extensive" across Europe but he repeated his rejection of calls for a ban. Independent