DHAKA (AFP) - The spread of deadly bird flu in Bangladesh has forced the closure of 40 percent of the nation's poultry farms and left half a million poultry workers jobless, industry officials said on Monday.

Government authorities said the virus was still "under control", although it has spread to 43 out of the country's 64 districts, forcing authorities to slaughter some 800,000 birds.

"It's a natural disaster like cyclone or floods. The poor farmers who raise chickens in their backyards are particularly hard hit by the bird flu," said Abdul Baki, principal scientific officer of the livestock department.

"But we still think things are under control," Baki said, adding the government was launching a massive plan to compensate affected farmers.

Baki's comments came as the authorities struggled to slaughter another 160,000 birds in one of the largest farms in the capital Dhaka. Officials said it would take another day to complete the slaughter.

The outbreak at Omega farm showed the disease was out of control, industry officials said.

"Omega is one of the top farms which rigorously maintained international bio-safety regulations but it was not spared by the deadly flu," said M.M Khan, a senior official of the Bangladesh Poultry Association.

"The situation is so bad nobody is buying any poultry these days. They're panicking. The crows and migrant birds are spreading the flu everywhere, leaving authorities simply hopeless," Khan said.

Already some supermarkets in the capital have suspended poultry sales, he said,

The flu has forced closure of at least 40 percent of the country's estimated 150,000 commercial farms, leaving at least half a million people jobless, Khan said.

The government has repeatedly urged people not to be frightened and begun a major drive to assure people that eating cooked poultry poses no health dangers.

It is also giving farmers 1.50 dollars compensation for each chicken slaughtered because of the virus.

Bangladesh was first hit by bird flu in February 2007 but the disease became dormant. Officials said outbreak resurfaced in January when 20 new districts were hit. So far in February another 11 have been hit.

Bangladesh's poultry industry is one of the world's largest, producing 220 million chickens and 37 million ducks annually.