BBC News' Richard Wilson reports

Amid suggestions from some experts that strains of BSE may be found in sheep, the Ministry of Agriculture, Fisheries and Food (MAFF) said there was "no evidence" to justify banning the sale of lamb.

Lord Sainsbury: Will carry on eating lamb

But it said investigations into any possible risk to human health would continue.

The latest episode in the long-running BSE saga comes as the chairman of the sheep subcommittee of the BSE watchdog SEAC, Professor Geoffrey Almond, warned there was a "distinct possibility" of BSE being present in the sheep population.

Theoretical risk

The Agriculture Ministry's statement was backed by Science Minister Lord Sainsbury, who has vowed to carry on eating lamb.

Lord Sainsbury said the risk of BSE in sheep was still theoretical, and factual proof was needed.

Prof Blakemore: "No reason for alarm"

But he said a call for further investigation by Professor Almond or other experts would be given "very serious attention indeed" by the government.

The President of the British Association, Professor Colin Blakemore, said: "I don't think there's actually any reason for huge alarm at this recent finding."

He said everything that was known about the disease suggested it originated from animal feed - a problem which has now been resolved.

'No new evidence'

In response to the publicity generated by the latest revelations, Chief Medical Officer Sir Kenneth Calman has issued a statement clarifying what SEAC recommended.

At its meeting on 30 July, "the Committee advised that there was no new evidence and no grounds at this stage for thinking that the likelihood of BSE in sheep is any greater now than in the past," Sir Kenneth said.

The committee had previously recommended that certain tissues from the lamb carcass should be removed from the food chain "on a purely precautionary basis", he said.

But "the Committee noted that there was no evidence that BSE was present in commercial sheep and concluded that no further action to protect public or animal health was necessary."

However, "public health remains the priority," Sir Kenneth said, and the Department of Health will review all evidence and take necessary precautions to protect it.

European investigations

Action by commissioners in Brussels has given a fresh boost to the BSE scare.

European scientists are to reinvestigate the link between BSE and lamb, despite assurances from the European Commission that there is no evidence of a health risk.

Some two years after European ministers turned down a Commission proposal to ban high risk parts of sheep from the food chain, the Scientific Steering Committee will meet later this month to consider the link.

Agriculture Commissioner Franz Fischler will now resubmit his proposal, although officials stress that he is acting on purely precautionary grounds.

"There is no evidence of health risk from BSE in sheep," said a Commission spokesman.

"However, we cannot exclude it. It is better to be safe than sorry."

Mr Fischler will be asking the Scientific Steering Committee to reconsider his proposals, before putting them to European agriculture ministers.

The suggestion is to ban the use of "specified risk materials" - the parts of the sheep most likely to become infected - from all sheep over 12 months old.

But most lamb consumed in the UK comes from animals under one year old.