The virus is carried by grey squirrels and is deadly to the native reds

The animal was discovered in the Pentraeth forest on Anglesey.

It died while receiving treatment at the Colwyn Bay Mountain zoo, where vets confirmed a second animal from the colony had developed squirrel pox.

The disease is fatal to red squirrels in the wild and is carried by immune non-native grey squirrels.

The Pentraeth forest is home to one of the largest colonies of red squirrels in Wales, and the animals are genetically distinct from populations across the rest of Britain.

There is a very real risk that a significant part of the population could be lost Dr Craig Shuttleworth

Experts say that squirrel pox is passed through direct contact and a high density of the animals in this area could pose a real risk to the whole colony.

"The virus could not have come at a worse time of year," stated Dr Craig Shuttleworth, woodland ecologist for Menter M�n.

"There are large numbers of pregnant and lactating female squirrels in the forest and other animals which will begin breeding soon.

"The squirrel pox virus can be spread by direct contact and any animal which becomes infected will die within two weeks. There is a very real risk that a significant part of the population could be lost."

Emergency

In a bid to save the colony, scientists said an emergency plan aimed at halting the spread of the disease has been implemented.

Red squirrels in the area will be caught and examined, while food left for the animals will be treated with anti-viral disinfectants. Viral screening of the animals will also be carried out by Defra's Veterinary Laboratories Agency.

Charles Dutton of the European Squirrel Initiative added: "This outbreak once again highlights the continuing threat posed to red squirrels by the invasive North American grey squirrel.

"The squirrel pox virus is carried by grey squirrels, which are immune to the disease. However once a red squirrel picks up the virus, the animal will die within two weeks."

'Cull'

An outbreak of squirrel pox at Newborough on Anglesey in 2006 was successfully controlled after steps were taken to cull grey squirrels in the area.

"The reappearance of this fatal virus in Wales gives cause for great concern as, alongside the more aggressive feeding habits of the larger grey, it has caused the disappearance of reds across large swathes of the UK," added Mr Dutton.

"It demonstrates the urgent need to remove greys from the landscape."