Sheffield Council has said it has suspended the use of all processed meat in school meals with immediate effect.
In a joint statement with caterer Taylor Shaw, it said:
Food Standards Agency (FSA) Chief Executive Catherine Brown has drawn vets and horse owners into the conspiracy behind horsemeat containing bute getting into the food chain.
Ms Brown highlighted that both had to sign horse passports if an animal was treated with the drug to ensure they were not sold on for human consumption.
"If both these people have done the right thing, horses with bute in don't make their way into the food chain," she said. "Someone has always broken the rules".
Previously the FSA said testing for bute is a "good indicator" of whether an animal was legally slaughtered.
When asked whether it would be fair to assume that six percent of the 9,000 horse carcasses she said were exported from Britain every year - which amounts to 540 animals - contained bute, Ms Brown replied, "That seems as reasonable a basis for making an estimate as any other".
The Food Standards Agency (FSA) said eight horses slaughtered in the UK tested positive for the veterinary drug bute.
It said six of the animals were slaughtered by LJ Potter Partners at Stillman's (Somerset) Ltd in Taunton, Somerset. They were then sent to France and "may have entered the food chain".
The remaining two did not leave the slaughterhouse in the UK - High Peak Meat Exports Ltd in Nantwich - and have now been disposed of "in accordance with EU rules".
A total of 206 horse carcasses were tested between 30 January and 7 February.
"The FSA is gathering information on the six carcasses sent to France and will work with the French authorities to trace them", the agency added.
Environment Secretary Owen Paterson said the formal involvement of EU law enforcement agency Europol in the meat fraud investigation is "an incredibly important step".
Speaking in the Hague after a meeting with Europol and the EU's judicial agency Eurojust, Mr Paterson said, "It's increasingly clear that this case reaches right across Europe".
"It's clear that Europol is the right organisation to coordinate efforts to uncover all wrongdoing and bring criminals to justice, wherever there may be".
"I will be speaking to my European colleagues again to urge their enforcement agencies to follow our lead and share all information they have with Europol", he added.
Agriculture Minister David Heath told the Commons that eight horse carcasses from the UK tested positive for the drug "bute" .
Although Mr Heath told MPs that three of those "may" have entered the human food chain in France, he later confirmed the figure was six.
A total of 206 horse carcasses were tested by the Food Standards Agency.
Anne McIntosh, the chair of the Environment Select Committee has stated that the horsemeat scandal is a 'European problem'.
She said the committee was surprised how widespread the issue was, and that the Food Standards Agency needs to work closer with its European counterparts to solve the issue.
Ministers are now facing calls from MPs for more testing of processed meat.
The Commons Environment, Food and Rural Affairs Committee chairman Anne McIntosh described the scale of the contamination in the food chain as "breathtaking" and warned that restoring consumer confidence would take time and money.
Ministers are facing calls from MPs for more testing of processed meat amid fears that beef products contaminated with horse meat could contain substances harmful to humans.
In a scathing report, the Commons Environment, Food and Rural Affairs Committee condemned the Government's "flat-footed" handling of the horse meat scandal, saying its ability to respond had been weakened by cuts to the Food Standards Agency (FSA).
The committee said the public appeared to have been "cynically and systematically duped" for financial gain by elements of the food industry - raising wider concerns about the safety of the contaminated products.
Number 10 sources say that the Food Standards Agency raid on Farmbox Food was the result of investigations which began in mid-January. It was part of co-ordinated action by officials, agencies and the police across the UK and at a European Union level.
The owner of a Welsh meat processing plant which is being investigated for mislabelling horse as beef denies doing anything wrong.
Dafydd Raw-Rees, the owner of Farmbox Meats Ltd in Llandre, Aberystwyth, told ITV News:
Mr Raw-Rees said that he has bought the beef from the abattoir in Yorkshire, which is also being investigated by the FSA.