The Sydney Spring Racing Carnival has had to be cancelled after news that eight racehorses stabled at the course have tested positive for equine influenza.

Royal Randwick Racecourse in Sydney has been put out of action as the flu infection spreads through the 700 horses stabled there.

They are the first racehorses to test positive since the beginning of the nation’s flu crisis.

Until today, the flu had been restricted to the pleasure horse industry.

Elsewhere in Australia an elderly horse has died in what is thought to be the first epidemic of the virus in the country.

The virus was initially discovered at Sydney’s Centennial Park stables before it spread to other locations across Queensland and New South Wales (NSW).

It is believed that breeding stallions which crossed from Japan a couple of weeks ago brought the disease into the country.

A flu outbreak recently shut the Japanese breeding industry down for three weeks.

The Federal Government announced today that it has established a $4 million fund to provide grants to people in NSW and Queensland who have been affected by the outbreak.