The deadly H5N1 strain of the virus was discovered on a chicken farm in Dongtai city and in another farm in Haian county both in eastern Jiangsu province, the ministry said in a statement posted on its website.

The discovery had prompted local agricultural authorities to step up vaccinations, while culling 377,000 chickens in the area around the farms.

The spread of the virus had not been detected in any other areas around the two farms, it added.

"Preliminary expert analysis from tests have found... The farm poultry could have been infected by migratory birds," it said.

The discovery in Jiangsu comes after an outbreak in Hong Kong, on the south coast of China, last week resulted in the slaughter of more than 90,000 chickens there.

Authorities in Jiangsu have also quarantined Haian county and Dongtai city and stopped the transport of all poultry and poultry products from entering and exiting the area, the ministry said.

Local agricultural officials were also stepping up disinfecting measures in the region, it added.

The outbreak was the first in mainland China since an outbreak was reported in Guangdong province, which neighbours Hong Kong, in June.

China's agriculture ministry warned last week of further bird flu epidemics in the nation during the winter months when migratory birds are in flight and weather conditions provide a good environment for the spread of the virus.

H5N1 has killed more than 200 people and ravaged poultry flocks worldwide since 2003, according to the World Health Organization.

Scientists fear the virus will eventually mutate into a form that is much more easily transmissible between humans, triggering a global pandemic.

China has had several bird flu outbreaks this year, and three Chinese have died from the virus so far in 2008, according to earlier reports.

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