The Pakistani government ordered on Monday the culling of 21,000 sheep from Australia after the animals were tested positive for salmonella bacteria and actinomyces, and declared unfit for human consumption.

The vessel which diverted the Australian sheep to Pakistan after the shipment was rejected by Bahrain had no problems when it earlier disembarked sheep from the same batch to Oman and Qatar. The animals were initially accepted by Pakistan and quarantined in the southern port city of Karachi.

The Pakistan Livestock and Meat Company, which paid A$1.31 million for the shipment, opposed the culling of the sheep because the decision was based on a single laboratory report and a separate probe is still being held. The firm threatened to initiate legal action against the culling of the animals.

Australia's Department of Agriculture, Fisheries and Forestry insisted the sheep were certified healthy when it left Australia and initially met Pakistan's animal health benchmarks for imported sheep.

Syed Abed Ali Shah, Pakistani Secretary for Livestock in the Sindh province, said over 600 sheep had been killed despite acknowledging Australia's tough regulatory policies on meat and livestock exports.

Mauro Balzarini, managing director of Wellard Exporters which shipped the animals, insisted the sheep are healthy.

"They are from healthy Australian flocks that feed Australian and international consumers with chops and roasts on a daily basis with no risks to human health. The sheep were farmed for human consumption, so it is disappointing that some healthy sheep are being euthanised when they are absolutely safe to be processed as intended," ABC quoted Mr Balzarini.

Unconfirmed reports, however, said hundreds of the infected sheep had been delivered to unidentified hotels and restaurants in Pakistan before the order from the Commissioner Karachi to cull the animals came out. Residents cited seeing hundreds of sheep loaded on trucks and picks-ups and transported from the cattle farm near Razzaqabad.