The drug in question, lasalocid, is permitted in poultry raised for meat. But the Soil Association claims that tests on eggs by the UK government's veterinary medicines directorate show residues were found in 12 per cent of egg samples last year, up from 1 per cent in 1999. This means that consumers may be eating up to three million eggs a day containing residues.
Similar drugs have been reported to cause severe illness and death in livestock such as cattle, turkeys and sheep. The Soil Association says that although there is no direct evidence of potential poisonous effects on humans from lasalocid, checks have never been made.
The veterinary medicines directorate findings could seriously undermine current intensive farming practices, which are increasingly coming under government and consumer scrutiny. Poor sanitary conditions and cross-contamination at feed mills have been blamed by government veterinary inspectors, according to the UK's Guardian newspaper.
The level of drug residues in eggs could also lead to tighter legislation. Lasalocid is regarded by the UK government as a food additive rather than a growth-promoting antibiotic, over which there are EU-wide controls. This means that no 'safe' limits have been prescribed on residues of lasalocid.
However, the veterinary medicines directorate points out that the figures might be exaggerated, as the body targeted tests at producers where there were known to have been problems with residues. The directorate says that its figures should therefore not be extrapolated to all eggs.
Nonetheless, this is a serious blow to UK egg producers. The controversy comes straight after a Food Safety Association (FSA) report that showed that just one in every 290 boxes of six eggs on sale has any salmonella contamination, compared with 1 in 100 in a 1995/96 survey.
"This is very reassuring and good news for the consumer," said Dr Judith Hilton, head of FSA's microbiological safety division. "Basically, if you're buying UK-produced eggs from shops and markets, the possibility of any salmonella contamination is very low indeed and significantly lower today than in the mid-1990s. The UK egg industry is to be congratulated on the excellent progress made."
But following the disclosure of the directorate's findings, the FSA says it is "disappointed" with the level of drug residue in eggs, although it insisted there were no immediate health concerns.
Europe's poultry industry has taken a battering of late. Meat scares continue to make consumers unsure about the safety of poultry products - last month, the Dutch government ordered the culling of 600 ducks on a farm after routine blood tests showed signs of antibodies to a mild strain of bird flu.
This followed an earlier announcement that the Dutch government had decided to cull all 22,000 chickens at a farm in Eemsmond in the northeast of the country. The Dutch are determined to ensure that the bird virus does not return - last year a mild form of the virus mutated into an aggressive variant, leading to the slaughter of a quarter of all Dutch poultry at a cost of hundreds of millions of euros. Some 30.7 million birds in total had to be slaughtered.
Europe as a whole is still at heightened alert following the recent bird flu epidemic that devastated parts of Asia. Last month, the European Parliament voted to create a European Centre for Disease Prevention and Control (ECDC), following growing public concern over animal disease epidemics.