The infected cat, found on the Baltic Sea island of Ruegen in northern Germany, is the first known case in Europe of the virus spreading from birds to mammals.
Ruegen is where the highly pathogenic form of H5N1 bird flu was detected in mid-February and more tests are being carried out to find out if the cat had the highly pathogenic strain of H5N1, which can kill humans.
There has been no recorded case anywhere in the world of cats infecting humans, but the discovery will raise fears of other animals becoming infected.
Cats were first infected with bird flu in Asia in 2004 following the outbreak of the deadly form of the virus in 2003.
Two domestic cats and a panther were the first recorded cases of infection with bird flu when they were discovered in tests by the Bangkok-based Kasetsart University in February 2004.
Dozens of tigers died of the disease at a farm in Thailand in October
2004 and Thomas Mettenleiter, the head of the Friedrich Loeffler
Institute said that it has long been known that cats can be infected if they eat infected birds.
Carcasses cleared away
The cat was found near a ferry that serves the island, where more than 100 cases of highly pathogenic H5N1 bird flu in wild birds have been detected in the past three weeks.
Hundreds of dead birds have been collected on Ruegen, with 250 soldiers helping to gather the carcasses.
Mr Mettenleiter said that although the carcasses have been largely cleared away, animals were still dying from H5N1 infection, which then acts as another source of H5N1 infection.
The highly pathogenic form of the virus has been responsible for 93 human deaths since 2003, mostly in Asia.
All the deaths so far have been caused by infection from birds to humans, but scientists are concerned the virus could mutate into a form that is easily transmissible between humans, sparking a pandemic.
More cases in Europe
Meanwhile the French agriculture ministry has confirmed another case of the deadly H5N1 strain of bird flu in a swan in eastern France.
The latest death brings the total number of wild birds affected in France to 18.
The swan was found in the commune of Monthieux, in the Ain department in the east of the country.
Sweden for the first time detected in ducks an unidentified strain of bird flu, feared to be the H5N1 strain.
Initial tests at Sweden’s the National Veterinary Institute “show that we’re probably talking about the same virus that has been spreading in Russia and China,” said the Swedish agriculture board.
H5N1 was also detected for the first time in Bosnia, the southern German state of Bavaria and a poultry farm in southwestern Russia where 103,000 birds were reported to have died in a week.
At the same time Britain said it was unlikely to escape.
Authorities in the west African nation of Niger have also confirmed that the deadly H5N1 strain of bird flu had been detected in the country and set up two security zones following an outbreak in neighboring Nigeria.
Animal Resources Minister Abdoulaye Djina said an Italian laboratory found H5N1 in two ducks among 54 samples from the southern Magaria region and the town of Tabande.
Soldiers and police are sealing of a zone around the affected area in preparation for the slaughter of all poultry.