Agriculture Minister, Nick Brown, told the Commons that in some areas even apparently healthy animals being kept within three kilometres of infected farms would all be killed.
Chief vet Jim Scudamore said such culls would be carried out in areas of Cumbria and Dumfries and Galloway, where the infection rate has been highest.
But some local farmers leaders have reacted angrily to the announcement, saying the new measures would be "absolutely devastating".
Further outbreaks of the disease across the country have been confirmed by the Ministry of Agriculture, Fisheries and Food on Thursday, bringing Thursday's total to 18 and the national total to 251.
About 90 countries, including the United States and Australia, have now banned live animal imports and meat and dairy products from the EU after the disease spread to mainland Europe earlier in the week.
The three-kilometre wide cull will also include sheep from the markets in Welshpool, Northampton and Longtown - and the flocks which they had entered'
But Andrew Spence, regional coordinator for Farmers For Action, North East, said the slaughter of healthy animals would cause "rural revolt", and he demanded a meeting with Mr Brown within the next 24 hours.
Mr Spence said: "Farmers up here will not tolerate anyone coming in and slaughtering animals that are not infected.
"It's bad enough killing them when they are infected, but to see a lifetime's work go down the drain is not on."
In Devon, where foot-and-mouth had been spreading from farm to farm, a new strategy of "intensive patrols" to all farms within the three kilometre zone of an infected farm would begin.
The National Farmers' Union said the measures would leave swathes of farmland "dead" but recognised the programme was necessary to try to stamp out the disease.
NFU president Ben Gill said: "These are strong measures which will leave farmers feeling desperate and appalled at the implications for our industry.
"But not to act in this way would be even more disastrous for Britain's livestock farmers."
Mr Brown also told MPs that 205,000 of Britain's 55 million pig, cattle and sheep population had been condemned, of which more than 75% had been slaughtered.
Compensation
He said that farmers would be compensated for healthy animals which had to be destroyed because movements necessary for welfare reasons could not be carried out.
It has been estimated that 2% of Scotland's flock will be killed across 500 farms.
But it is so far unclear how many animals will have to be destroyed in the rest of the UK.
The Prince of Wales is donating £500,000 to charities that are helping farmers cope with the crisis, and he revealed on Thursday that the sum would be matched by the Duke of Westminster.
Nicky Lyon from farmers' charity the Royal Agricultural Benevolent Institution said the donation "showed up" the government.
"They should be more open-handed than him - they're not doing enough," she told the BBC.
Bishop's summit
"There are a lot of people out there for who cash flow has dried up totally.
The charity has seen calls to the helpline increase ten-fold since the start of the foot-and-mouth outbreak, and other organisations are also voicing concern about farmers' welfare.
The Bishop of Durham is to host a summit for those affected by the outbreak in the county, one of the worst affected areas in the UK.
Ministers are so far resisting pressure to postpone the English local council elections due to be held on 3 May - the day also widely tipped as Tony Blair's choice for the general election.