Government ministers were warned in 2011 that horse meat was illegally entering the human food chain, it was claimed.
John Young, a former manager at the Meat Hygiene Service, now part of the Food Standards Agency (FSA), told the Sunday Times he helped draft a letter to the Department for Environment, Food and Rural Affairs (Defra) in April that year.
But he told the paper the letter to former minister Sir Jim Paice on behalf of Britain's largest horse meat exporter, High Peak Meat Exports, which warned that flesh with possible drug residue getting into food could blow up into a scandal, was ignored.
In the letter the company warned the Government that its passport scheme designed to stop meat containing the anti-inflammatory drug phenylbutazone, known as bute, getting into the food chain was not working, calling it a "debacle".
"Defra gave nearly 80 organisations the authority to produce passports and some of them are little better than children could produce... It's a complete mess," he said.
Sir Jim said he did not remember seeing the warnings, telling the Sunday Times: "If this information was in Defra and was not being acted upon, it warrants further investigation. I would like to know why on earth I was not being told about it."
He admitted the horse passport scheme to stop bute getting into the food chain was not working, saying: "We now know that and we need to know why."
Meanwhile the boss of one of the country's leading supermarkets warned today that consumers could end up paying the price for the horse meat scandal, as ensuring food has the best safety guarantees means it can no longer be regarded as a "cheap commodity".
Writing in the Sunday Telegraph, Mark Price, the managing director of Waitrose, said rising costs of rearing animals could mean that "somewhere along that long supply route, somebody has looked to cheat and take advantage of these circumstances either for their own personal greed or to keep a company afloat."
Waitrose has not been affected by the scandal, which Mr Price puts down to its rigorous verification processes.
But he said that not every part of the food industry has been so diligent.
"If meat is being purchased blind from outside the UK, and sometimes even via the internet in bulk, it is less easy to find those guarantees that full knowledge and traceability give," he told the newspaper.
"If, at the same time, there is a requirement to hit a price point for consumers under financial pressure then there will be an inevitable strain in the supply chain.
"If the question is 'Who can sell the cheapest stuff?', I'm afraid it is inevitable that there will be a slackening of product specifications - even if, not as concerning the current situation, it's less mint in spearmint gum or not as thick a layer of chocolate on your biscuit."
He added: "The simple fact is that food cannot be seen as a cheap commodity when so many factors are working against that premise, including population growth, climate change, greater urbanisation, and the spread of Westernised diet in the developing world."
Three men arrested by police investigating the horse meat scandal were released on bail yesterday as officials continued to examine evidence today from three plants raided on Friday.
The FSA said it had passed on evidence from two premises in Tottenham, north London, and one in Hull, East Yorkshire, to Europol - the European Union's law enforcement agency - after investigators, accompanied by police officers and local authority officials, removed meat samples for testing.
The move comes after Dafydd Raw-Rees, 64, the owner of Farmbox Meats near Aberystwyth, and a 42-year-old man, were arrested in Wales on Thursday on suspicion of offences under the Fraud Act.
A 63-year-old man was also arrested on suspicion of the same offence at Peter Boddy Slaughterhouse in Todmorden, West Yorkshire.
The men have been released pending further inquiries and will return to answer bail in Aberystwyth at a later date, Dyfed Powys Police said.
The FSA has conceded it is unlikely the exact number of people in the UK who have unwittingly eaten horse meat will ever be known.
Chief executive Catherine Brown said that testing was the right way to address the issue, and said the focus would be on areas of higher risk.
But she admitted that the number of people who had unknowingly eaten horse meat was likely to be impossible to ascertain.
"I don't think that we ever will (know how many), because these tests are a snapshot, so even where we find things it is very hard to work out how long, what number of batches, so I think it is unlikely that we will ever know that. It is shocking," she told the BBC.
One of the plants raided, Dinos & Sons Continental Foods in Tottenham, said it was "co-operating with local trading standards officers and the FSA" in a statement that said it had never "produced or manufactured anything that is under investigation or is the subject of any possible contamination or mislabelling".
A second company was named as Flexi Foods Ltd, in Hull, which stored meat at Dinos & Sons Continental Foods, it was reported.
A spokesman for Flexi Foods said: "We are aware of an ongoing, wide-ranging, Food Standards Agency investigation. We have been asked to supply some information in relation to only one part of this investigation, with which we are quite voluntarily co-operating.
"We feel it would not be fair, nor appropriate, to comment any further whilst the authorities continue with their much wider investigations."
On Friday the FSA released test results for possible horse meat contamination.
The watchdog said 2,501 tests were conducted on beef products, with 29 results positive for undeclared horse meat at or above 1%.
The 29 results related to seven different products, which have already been reported and withdrawn from sale.
The products linked to the positive results were confirmed as Aldi's special frozen beef lasagne and special frozen spaghetti bolognese, the Co-op's frozen quarter pounder burgers, Findus beef lasagne, Rangeland's catering burger products, and Tesco value frozen burgers and value spaghetti bolognese.
As the results were confirmed, pub and hotel group Whitbread became the latest company to admit horse DNA had been found in its food, saying their meat lasagnes and beefburgers had been affected.
The firm, which owns Premier Inn, Beefeater Grill and Brewers Fayre, said the products had been removed from their menus and will not be replaced until further testing has been carried out.
Horse meat was discovered in school dinners for the first time since the scandal began, it was also disclosed.
Cottage pie testing positive for horse DNA was sent to 47 Lancashire schools before being withdrawn
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