* Products withdrawn from sale in Italy and Spain

* Nestle latest company affected in spreading scandal

* Delivery suspended of products with beef from German firm

LONDON - Nestle, the world's biggest food company, has removed beef pasta meals from sale in Italy and Spain after finding traces of horse DNA.

The discovery of horsemeat in products labelled as beef has spread across Europe since last month, prompting product withdrawals, consumer anger and government investigations into the continent's complex food-processing chains.

Swiss-based Nestle, which just last week said its products had not been affected by the scandal, said its tests had found more than 1 percent horse DNA in two products.

"We have informed the authorities accordingly," Nestle said in a statement on Monday. "There is no food safety issue."

Nestle withdrew two chilled pasta products, Buitoni Beef Ravioli and Beef Tortellini, in Italy and Spain,

Nestle was suspending deliveries of all products made using beef from a German subcontractor to one of its suppliers, Nestle said.

Governments across Europe have stressed that horsemeat poses little or no health risk, although some carcasses have been found tainted with a painkiller banned for human consumption.

But the scandal has damaged the confidence of consumers in supermarkets and fast food chains since horsemeat was first identified in Irish beefburgers.

Retailer Lidl said on Monday it had withdrawn products from its stores in Finland and Sweden after finding traces of horsemeat.