EGHAM, England - Veterinary authorities confirmed a new foot-and-mouth outbreak on the outskirts of London on Wednesday - just days after the government lifted livestock restrictions following the appearance of the devastating disease last month.

Officials enter farm fields near Egham in Surrey in southern England September 12, 2007. [Reuters]

The highly contagious disease was found in cattle grazing in Surrey, a county that borders London, and close to a laboratory that was linked to the August outbreak. The discovery created panic among farming communities that lost millions in revenue last month.

"I'm really worried because I've got loads of pigs, a few cattle and horses and we were getting the pigs ready for slaughter tomorrow," said Andrew Parsons, a Surrey farmer.

The government imposed a nationwide ban on all livestock movement, while scientists tried to identify the strain and origin of the disease. Authorities also ordered the slaughter of about 300 cattle and pigs in the affected area, said Britain's chief veterinary officer, Debby Reynolds.

The European Union imposed its own ban on livestock movements from Britain.

"The utmost priority is to cull the animals to control disease and to put movement control around so that reduces the risk of any further spread," Reynolds told British Broadcasting Corp. television.

Farmers' fears were confirmed when the Institute for Animal Health confirmed a positive test for foot-and-mouth within an hour of receiving samples from the area of open fields just five miles, or seven kilometers, from Queen Elizabeth II's Windsor Castle.

Animals on a farm neighboring the fields were also being slaughtered on suspicion of being infected with the disease, Britain's environment department said later Wednesday.

Reynolds also said Wednesday that veterinary authorities were carrying out precautionary tests for possible foot-and-mouth disease in one rural area of Norfolk, a county 115 miles (185 kilometers) northeast of central London.

The August 3 outbreak in Surrey led to Britain slaughtering about 600 animals and suspending exports of livestock, meat and milk products for nearly three weeks. The final restrictions on cattle movement following that outbreak were lifted on Saturday.

The recent cases have offered a grim reminder of a 2001 outbreak of the disease that led to the slaughter of thousands of animals in huge pyres across the country and millions of pounds in lost revenue to British farmers.

The British agriculture industry estimated the disease led to losses of around in 8 billion pounds (US$16 billion; euro11.7 billion).