Ministers are to introduce new measures to try to prevent a bird flu pandemic breaking out, Environment Secretary Margaret Beckett has told MPs.
The EU has banned the import of wild birds
Full details would follow "within days". In the meantime, bird fairs, markets and shows will be banned unless experts declare them safe.
Mrs Beckett said the H5N1 strain of bird flu which killed two parrots in UK quarantine probably came from Taiwan.
The EU has banned the import of live birds to limit the disease's spread.
The H5 strain was also identified in some of the 32 birds which died in UK quarantine before 16 October, Mrs Beckett told MPs in a Commons statement.
The release of birds from quarantine should now be subject to a case by case risk assessment, she said.
The H5N1 strain has killed at least 60 people in Asia since 2003. It has been found in birds in Russia, Romania and Turkey.
The H5N1 virus, also known as avian flu, was discovered in wild swans found dead at a pond in eastern Croatia last week, the EU announced on Wednesday.
Health officials are attempting to stop the spread of bird flu.
People at risk at present are those who work closely with infected birds.
But there are fears bird flu could mutate into a form where it could be transmitted from human to human enabling it to spread more easily.
Mrs Beckett told MPs she planned to introduce "within the coming days, sensible and measured regulations, which will assist us in reducing the risk of disease and strengthening our ability to control an outbreak".
A register of commercial poultry producers would be established, she said, and the possibility of keeping poultry indoors was being urgently discussed with the industry.
She said the parrots that died in UK quarantine had been culled and anti-viral drugs were given to staff who came into contact with them.
"The quarantine system is succeeding in providing the protection that it is in place to deliver," she said. "That is not a reason for complacency.
"We are taking these developments very seriously but they are not in themselves a cause for undue alarm.
"Avian flu does not at present transmit easily to humans."
But Mrs Beckett said while Britain's disease-free status on avian flu remained unaffected, ministers and officials "must remain vigilant".
About 15 consignments of birds remained in quarantine, but their release would be looked at on a case by case basis, she added.
Shadow environment secretary Oliver Letwin welcomed government measures to combat the disease.
But he asked why Mrs Beckett and her ministers "strenuously resisted EU proposals to impose a ban on wild bird imports".
He also questioned why quarantine procedures were "so lax that birds from different continents are kept together, test samples are pooled" and there was no clarity in her department about the implications of the tests.
Referring to the foot and mouth outbreak of 2001, he added: "We do not want to see your department once again rendered impotent in the face of disaster and the army being brought in to clear up the mess."
But Mrs Beckett said the government had not resisted an EU ban on wild bird imports, adding that the question of the separation of birds was being considered.
Norman Baker, for the Liberal Democrats, said it was important to strike a balance between adopting sensible precautions while not alarming the public or damaging the farming industry unnecessarily.
He urged Mrs Beckett to confirm that there was no greater threat from eating poultry now than there had ever been, despite reports from the European Food Safety Agency about the risks of eating undercooked chicken and raw eggs.