Hong Kong plans to slaughter all live poultry in the territory's markets following the appearance the H5N1 strain of bird flu. As Naomi Martig reports from Hong Kong, this is the most serious outbreak of the virus in the city where it was discovered in five years.

Woman walks past some cooked chickens outside restaurant in Hong Kong, 12 Jun 2008

Hong Kong authorities say the cull affects all retail poultry vendors, and about 3,500 birds will be killed to prevent the spread of the disease.

The move follows an outbreak of the H5N1 virus on Saturday, which led authorities to suspend live poultry imports from mainland China. Days later, the virus appeared in three city street markets - the first outbreak in the markets in five years.

The government plans to compensate vendors who face losses because of the cull.

Peter Cordingley, a spokesman for the World Health Organization regional office in Manila, says despite the financial concerns that bird flu outbreaks create, officials in Hong Kong were wise in reporting first, and culling fast.

"Right at the beginning of this outbreak in 2003-2004, there were some governments in the region who were reluctant to tell the world what was going on because they were frightened of the impact on their poultry trade and also about tourism," he said. "They discovered pretty quickly that the costs of not reporting the outbreak were far higher than any costs they might have incurred in losses of exports and incoming tourists. There is no way around this."

Hong Kong drew praise from international medical experts in 1997, when the virus appeared for the first time ever, and crossed from birds to humans. Eighteen people in the city contracted the virus, and six died. Researchers in Hong Kong quickly identified the new virus, and the government slaughtered the city's entire poultry population - about one and a half million birds.

That cull appeared to have kept the virus contained until 2003, when it appeared in Southeast Asia and then spread across Asia to Europe and Africa. It killed tens of millions of birds and forced government culls of even more.

Cordingley says Hong Kong set the benchmark in 1997, and now, for the vigilance that is needed to prevent the spread of the disease.

"Hong Kong sits at the edge of a volcano," he said. "If you look at Hong Kong geographically, it is surrounded by the virus and they managed to keep the virus out because they put in place a whole host of precautions. They've worked very well until now."

Since the latest outbreak began in 2003, more than 240 people have died of bird flu, mostly in Asia. The majority of human bird flu cases involved contact with infected poultry. Experts fear, however, that the virus will change into a form that will spread easily among humans, causing a worldwide epidemic.

Southern China is suspected of being the source of several flu epidemics in the past. In 2002, the virus known as SARS first infected humans there and went on to infect more than 8,000 people around the world, killing almost 800. Because of the risk of contagious illnesses spreading throughout the crowded city, Hong Kong has developed internationally recognized virus research facilities, and a system to rapidly respond to outbreaks.