"When we have made sure that the stalls are clean and free of viruses, we will consider allowing the selling of poultry again," Hong Kong's Secretary for the Environment and Food, Lily Yam told reporters at a slaughter site in Hong Kong's Kowloon district.

Witnesses said about 50 government staffers in white disposable coats and caps would carry out the slaughter operation at the Kowloon wholesale market into Saturday afternoon.

Hong Kong's chief executive Tung Chee-hwa also told reporters on Saturday at a briefing not related to the slaughter operation that the government wants a long-term solution to rid the public health hazard, and would review the possibility of setting up a central abattoir.

A centralised poultry slaughtering operation could minimise the spread of potential viruses, but it could also end a culinary tradition of serving fresh poultry in Hong Kong.

Hong Kong residents consume around 100,000 fresh chickens a day, more than 70 percent of which come from mainland China.

China earlier in the week denied responsibility for the bird flu outbreak in its Hong Kong Special Administrative Region, but said it would help prevent the disease from spreading.

The source of the latest flu strain in Hong Kong has yet to be traced. The virus was first discovered during a routine test in early May.

A spokeswoman at the Agriculture, Fisheries and Conservation Department told Reuters more than 43,000 birds would be put to death on Saturday inside rubbish containers with carbondioxide gas. The carcasses would then be disinfected and bagged for dumping in landfills.

The Hong Kong government said it already slaughtered 24,809 poultry on Friday in 92 stalls to prevent the spread of the H5N1 virus.

The local poultry trade is expected to receive compensation totalling HK$80 million (US$10.26 million) from the government as a result of the ongoing poultry slaughter in Hong Kong. But vendors were eager for business to resume.

"We hope the government will take all the measures and restore trade. That's a priority. I have staff waiting to be paid," said Wong Kum-yiu, chairman of the Kowloon Poultry Association.

MACAU ALSO INFECTED

But in neighboring Macau, the H5N1 virus has been detected in two samples taken from geese imported from mainland China, the Macau Government Information Bureau said early on Saturday.

A spokesman for the Macau bureau said the virus was different from the one found in Hong Kong in 1997, which was harmful to humans. But Macau has nevertheless decided to slaughter its 40,000 poultry. The count was estimated at 20,000 earlier.

This is the second time in less than four years that Hong Kong has had to kill off all poultry. In 1997, the government slaughtered 1.4 million birds when a different avian flu virus, which killed six people, swept the territory on the south China coast.