A disease which has caused birth defects and miscarriages in livestock has been found on 74 farms in England.
The Schmallenberg infection has been diagnosed five times in cattle and 69 times in sheep, Defra officials said.
But the National Farmers' Union warned cases of the virus, which first emerged in the Netherlands and Germany last year, were being "under-reported".
Humans are thought to be unaffected by the virus, which is thought to be spread by midges, mosquitoes and ticks.
In England, the disease has now been identified on the Isle of Wight and in Wiltshire, West Berkshire and Gloucestershire.
This is in addition to farms in Norfolk, Suffolk, Essex, Kent, East and West Sussex, Hertfordshire, Surrey, Hampshire and Cornwall, which have previously identified cases.
The Department for Environment, Food and Rural Affairs said it suspected livestock may have got the virus from infected midges blown across the Channel from affected areas in Europe.
'An unknown'None of the affected farms have imported animals during 2011 from the affected areas in mainland Europe.
The impact of the disease on the UK sheep flock should become clear over the next two weeks as the lambing season reaches its peak.
The UK's chief veterinary officer, Nigel Gibbens, said farmers and vets had been "very good about reporting the disease".
Defra had received 150 reports of the virus but only 74 of those had proven positive, he said.
"Farmers are rightly concerned but no there is no panic at all," he told the BBC News Channel.
Peter Kendall, president the NFU, told the BBC News Channel that some farms had reported losses of up to a quarter of their lambs.
East Sussex farmer Frank Langrish, an NFU spokesman, warned there was "huge under-reporting" of cases of the virus.
"We had a meeting last week about the virus and all the farmers there had seen cases but only about one in five had actually bothered to report it," he said.
"The number of cases the Animal Health and Veterinary Laboratories Agency (is reporting) are way under what is happening on the ground."
Ian Johnson, spokesman for the south-west England branch of the National Farmers' Union, said farmers were worried about the disease.
"Nobody knows much about the virus and nobody knows the extent to which it may have spread," he said.
"That will manifest at peak lambing time in March and April."
He said the risk should be kept in context - last year in south-west England 25,000 cattle had to be slaughtered because of Bovine TB, he said, while so far less than 100 cases of Schmallenberg have been reported.
But he added "the problem is, it's an unknown", and went on: "Potentially, it could be extremely serious depending on how widespread it is."
Mr Johnson urged farmers who suspect their livestock might be affected to report it despite the virus not being classified as a "notifiable disease".
"We need to keep farmers aware and keep them reporting it so that we can see the extent of it," he said.
David Willison, who keeps sheep and Jersey cattle at Cinderbarrow Farm in Cumbria, told BBC Radio 4's Farming Today programme he was concerned about the virus and was waiting to see what would happen, despite his farm being in north-west England, far from the farms where the virus has been reported.
He said the fact that the disease was new made it difficult to predict its spread, adding that the latest information suggested the virus was "slowly creeping" further north in the country.
Phil Stocker, chief executive of the National Sheep Association, said there was currently no compensation for farmers whose animals suffer from the disease.
Since it was a relatively new affliction, they would not be insured against it, making it a "direct hit" on the farmer's pocket, he said.
Price riseHe told the programme: "The costs of keeping a ewe right the way through the year to produce one lamb have been undertaken by the farmer, and if the lamb is born dead through Schmallenberg really the loss is the value of the lamb that would be sold.
"At the moment, that would be anywhere between £80 and £95 a head."
David Willison, farmer
The easiest way of telling if you've got it is if you start getting defected lambs - one with bad joints or stillborn, sheep off colour. If you saw them you would have to ring the relevant department and report it.
It is very difficult to do a lot when everybody is learning. There are no guidelines to work with based on what has been done in previous events.
Everybody just has just got to do what they can. It's the not knowing. It's the waiting and wondering. And if you find a lamb that is deformed you would be wondering whether the disease has come or not.
Like any animal, you do get deformities - odd problems - a small percentage of time so you would also be looking to see if it was something you had seen before or something new.
Mr Stocker said that if livestock numbers fell steeply, the dynamics of supply and demand could mean that the price of lamb could rise for shoppers.
A Defra spokesman said: "As everyone connected with the livestock industry has been expecting, the number of cases of Schmallenberg has increased as lambing and calving begin to gather pace.
"As farmers, vets, and governments continue to gather information about the progress and effects of this disease, it's vital that farmers continue to report any suspicions they have as soon as possible.
"The European Centre for Disease Prevention and Control says it is unlikely Schmallenberg virus would cause disease in humans."
Last week, Cambridge scientist Dr Dan Tucker predicted that the launch of a vaccine to combat the disease was about two years away.
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