The outbreak - the third reported by Beijing in the past two months - occurred in Changji city near Urumqi, the provincial capital, said the FAO, quoting government data.

The news came as China denied encouraging farmers to use a drug meant for humans to stop the spread of bird flu in poultry, but said it will investigate.

Ministry of Agriculture veterinary director Xu Shixin said ``the government has never permitted'' the drug amantadine to be used on poultry, a practice reported to have been going on since the 1990s on a wide scale.

However, in an interview with the China Daily, Xu seemed to acknowledge the antiviral drug could have been used by some farmers on their flocks and said the ministry planned to dispatch inspection teams nationwide to stop the drug from being used on poultry.

``We'll take measures soon to curb the action,'' he was quoted as saying.

In the Xinjiang outbreak, FAO representative Noureddin Mona said

authorities had culled 1,490 birds, including the infected geese and ducks and those raised in nearby farms.

``The ministry said it is under control,'' he said. ``No human cases were reported.''

The birds were diagnosed by a national bird flu laboratory to have died from the deadly H5N1 strain, said Mona. The ministry's report did not say when the outbreak occurred.