Chief Veterinary Officer Debby Reynolds said an interim epidemiology report on the outbreak "indicates that infection may be contained to the Surrey area."
The Department for Environment, Food and Rural Affairs said that animals slaughtered Wednesday as a precaution on a farm within the protection zone around the original outbreak did not have foot-and-mouth disease.
The farm was adjacent to one of two properties where livestock had tested positive for the disease. More than 500 animals have been killed since the outbreak began.
Reynolds said late Thursday that cows in a second area of the southern England county of Surrey had shown "mild clinical signs of infections," announcing that a new 3-kilometer (1.8-mile) exclusion zone had been set up around a farm previously unlinked to the outbreak.
Prime Minister Gordon Brown said Friday that foot-and-mouth disease had been stopped from spreading outside a small area of England, despite tests for a suspected new outbreak in a herd several miles (kilometers) from the initial cluster of cases.
The news raised fears the virus was spreading beyond the area of the original outbreak, despite strict measures brought in to contain it. However, the farmer affected said he was confident his animals did not have foot-and-mouth, and officials said they were cautiously optimistic the disease had not spread beyond the county of Surrey where it was first discovered last week.
"We have restricted the disease to a limited area of this country," Brown said. "The risk of it spreading out of these areas is low, if not negligible."