PARIS (AFP) - France, Europe's biggest poultry producer, stepped up surveillance Thursday after tests on three dead swans confirmed an outbreak of the H5N1 strain of bird flu, which can be fatal to humans.

Agriculture Minister Michel Barnier raised the threat level from bird flu from "moderate" to "high" following the test results on the swans that were found dead in northeast France last week.

It is France's second outbreak of the deadly strain of bird flu in 17 months, but Health Minister Roselyne Bachelot said there was no reason for alarm.

"France is not threatened by a bird flu pandemic as there has not been, for the moment, a human contamination from the H5N1 virus," Bachelot said.

But she added "we must be vigilant as the great flu epidemic that followed the war of 1914, the Spanish flu" came from a strain of bird flu.

Scientists believe a strain related to today's bird flu virus caused the death of tens of millions of people during the Spanish flu pandemic.

"We must do what is necessary to ensure that all of the agencies, the entire health system is ready to deal with a mutation of the virus" that could attack humans, said Bachelot on French television.

Fresh measures were ordered to ensure that chickens and other poultry did not enter into contact with wild birds and that they undergo monthly veterinary checks.

Pigeon competitions have been banned and a one-kilometre (0.6 mile) exclusion zone established around the pond in the Moselle department where the dead swans were discovered was maintained.

A second 15-kilometre "observation" zone was set up around the pond at Assenoncourt but a spokesman for the local municipality said no other dead birds had been found since the swans, which he described as a "reassuring" sign.

A first outbreak of H5N1 in February 2006 was detected in 62 dead birds in central France and spread to a farm near the town of Versailleux where hundreds of turkeys were slaughtered.

It was also the first outbreak of the virulent strain in the European Union.

France produces 900 poultry per year including 700 chickens, according to the Confederation of French Poultry Producers, representing a four-billion-euro industry. The sector employs 80,000 people.

While the virus is highly contagious among poultry and can spread to an entire flock, it remains difficult for humans to catch.

A total of 191 people worlwide have died of bird flu, according to the World Health Organization which has reported 317 cases in its June 29 tally.

Indonesia, Vietnam and Thailand top the list of most affected countries.

France had stepped up surveillance after several cases of the H5N1 virus were discovered in Germany and the Czech Republic last month.

"The national laboratory of the French agency for animal health has confirmed the presence of the H5N1 highly pathogenic virus on the three swans found dead in a pond near the town of Assenoncourt," said a statement from the agriculture ministry.

In the Netherlands meanwhile, the authorities ordered all poultry to be kept inside. They announced the measure after what they called the discovery of a bird flu case "not far from the Netherlands".