"Yes ... it is bird flu," the official, involved in managing the crisis said on condition of anonymity when asked about market rumours that two Thai patients had tested positive for the disease.
Earlier, Thai Prime Minister Thaksin Shinawatra said the country may well have a bird flu outbreak as five people were being tested for the disease.
"It is very likely that we could have bird flu here, but I haven't seen the results yet," Thaksin told reporters a day after Japan suspended chicken imports from Thailand, which has a huge and lucrative poultry industry.
The World Health Organisation says bird flu could develop into an epidemic worse than SARS, another disease which crossed from animals to humans and frightened the world last year.
Thaksin said his government would accept the consequences if bird flu were confirmed. "If it were to be the bird flu, we will accept it accordingly," he told reporters in English.
"Everything must be scientifically proved. If it is proved scientifically, we have to tell the whole world that we do have the bird flu"
Thai Prime Minister
"Everything must be scientifically proved. If it is proved scientifically, we have to tell the whole world that we do have the bird flu," he said.
As Thaksin spoke, top economic and health ministers met to map out strategies to cope with the economic and health impact should the laboratory results prove that bird flu has leapt to humans, as it has in Vietnam.
The potential impact of a bird flu outbreak was illustrated on Thursday by Japan's decision to suspend poultry imports from Thailand. Thailand's other major customer for its poultry is the European Union, which said it would take "immediate action" if Bangkok confirmed an outbreak.
Hong Kong ban
The greatest fear is that the bird virus could combine with a human flu virus to produce a contagious and deadly disease against which people have no defence.
Hong Kong has imposed a ban on imports of Thai poultry amid fears bird flu has reached the Southeast Asian nation, the Hong Kong government said.
"This is a precautionary measure in view of the suspected avian influenza situation in the country," the statement said.
Meanwhile, the United Nations' Food and Agriculture Organisation (FAO) said it was concerned that Vietnam was not culling enough chickens to contain an outbreak of bird flu that has killed five people.
Around 2.5 million birds have been slaughtered or died from the H5N1 strain of avian influenza in the country, but many more need to be killed to prevent transmission of the virus, according to the UN agency.
"I am still somewhat concerned," said Anton Rychener, FAO head in Vietnam, when asked if the mass cull of all chickens in affected areas was actually being carried out.
"The government (Vietnam) is only paying around 5,000 dong (30 cents) for a culled bird, but the market value is more like 50,000 dong, That's why we are seeing a reluctance to carry out the cull."
"The government is only paying around 5,000 dong (30 cents) for a culled bird, but the market value is more like 50,000 dong, That's why we are seeing a reluctance to carry out the cull."
The authorities have instructed that all chickens within a three kilometre radius from where infected birds are detected must be slaughtered and that a 10-kilometre isolation zone around the areas be set up.
The UN official also said he was aware of reports that there had been a bird flu outbreak on a poultry farm in July last year in the northern province of Vinh Phuc which was covered up by the Vietnamese government.
The Vietnam government says 19 of its 64 provinces and cities have reported outbreaks, but the real figure is thought to be much higher.