Workers slaughtering sheep were seen cross-contaminating carcasses going for food with potentially dangerous body parts most likely to contain BSE if the disease has really crossed from cows to smaller farm animals. There has been no evidence outside the laboratory that this has happened but the removal of risk materials is seen as a key precautionary measure in preventing a repeat of the cattle industry disaster considered the prime culprit for the deaths of 125 Britons and the inevitably fatal illness of 12 others.

The government's meat hygiene service, responsible for monitoring abattoir controls, has had to issue reminders to its veterinary staff, who are meant to ensure rules are enforced in individual plants.

The report is embarrassing since the failure to police similar measures in cattle slaughter during the early 1990s, before a probable link between BSE and the human deaths was established in 1996, came back to haunt the then Tory government.

The inspectors, who visited Britain at the end of May, saw only two sheep slaughterhouses, and in both workers responsible for removing spinal cords, potentially risky body parts, also touched the carcasses without washing hands in between.

The Department of the Environment, Food and Rural Affairs last night accepted there was no room for complacency on abbatoir controls, but added: "Results of enforcement visits show levels of compliance across Great Britain remain extremely high."