Japan has been forced into the 'emergency slaughter' of 112,000 chickens after confirming that the virus, last seen in the country three years ago, is back.
Urgent DNA tests were conducted after 200 birds suddenly died in just hours at a farm in Kumamoto, southwestern Japan.
Officials have now confirmed it IS the deadly H5 strain of the virus and could even be the SAME super-resistant H5N1 strain that spread around the world within days in 2005 and killed more than 600 people.
The entire country is on 'high alert' and road blocks have been set up to prevent the spread of the disease after another farm in the same region ALSO confirmed an outbreak.
Japanese Agriculture, Forestry and Fisheries minister Yoshimasa Hayashi said: "We will do our best to contain the outbreak as quickly as possible."
A senior official added: "We have finished the slaughtering operation and are now preventing the virus from spreading to other areas."
It comes just weeks after ministers in Tokyo warned farmers of the 'high risk' of avian flu returning after an outbreak in neighbouring South Korea.
Experts have long warned that a bird flu pandemic poses one of the greatest known risks to human health.
The UN has warned of a 'catastrophe' with up to 150 million deaths if a deadly avian strain - such as H5N1, which kills 60 per cent of those it infects - mutated into a form transmittable between people. Other experts estimate the death toll could be even higher.
Neil Ferguson, a professor of mathematical biology at Imperial College London, said up to 200 million people could be killed.
He added: "Around 40 million people died in 1918 Spanish flu outbreak. "There are six times more people on the planet now so you could scale it up to around 200 million people."
A Department of Health contingency plan says there could be between 21,500 and 709,000 deaths in the UK.
Carried by wild fowl, bird flu spreads quickly among poultry and infects humans living or working in close proximity to birds with the virus.
Virologist Robert Webster, the world's leading expert on bird flu, said: "Nature has already shown us that there is a virus out there that kills most of the people it infects.
"We ignore it at our peril.
"What people don't appreciate is that H5N1 has already been the cause of a chicken apocalypse.
"Once it learns to go human to human there'll be no stopping the damn thing."
He added: "We were extremely lucky with the H1N1 swine-flu pandemic in 2009.
"Nature didn't put in the killer genes, that's all.
"At the moment, politicians have no interest in flu and you can't blame them. No one is dying.
"When bird flu gets to the US, however, I predict people will wake up to the need for vaccination pretty quickly."
Because H5N1 is so deadly to poultry, it is considered 'highly pathogenic' or highly disease causing.
H5N1 first reached the UK in October 2005 in a parrot from South Africa. Within 16 months 1,580 turkeys in Suffolk were dead and a further 152,619 birds had to be culled.
In the last 11 years 650 human infections have been reported to the World Health Orgranization (WHO) by 15 countries. More than 400 people have died.
In 2011, 62 human cases and 34 deaths were reported across Bangladesh, Cambodia, China, Egypt, and Indonesia.
