The Food Standards Agency (FSA) said that the Loyd Grossman curry sauce on sale in the UK had been found to be contaminated with the potential carcinogenic dye.
This latest product joins over 600 well known processed foods already pulled from the shelves following the largest food product recall in the UK's history.
The affected jars of 'Loyd Grossman red lentil dansak curry sauce', made by Premier Foods, have a best before date of the end of July 2006 and have been on sale at a limited number of Waitrose and Sainsbury's supermarkets.
Last month the discovery of sudan 1 in a consignment of Crosse and Blackwell Worcester sauce - used as both a tabletop sauce and food ingredient - made by UK manufacturer Premier Foods triggered the recall of foods from caesar dressing, pasta sauce and spicy pepperoni bake, to chicken hotpot and steak pie.
Sudan 1 to IV are classified as carcinogens by the International Agency for Research on Cancer and are banned under European Union rules.
Sudan 1 came to the attention of the food industry in 2003 when France alerted member states to its presence in an Indian-sourced chilli powder. Today, the European Commission requires that imports of chilli and chilli products - including curry powder - cross the EU border with a certificate that proves they are free of the harmful chemical dyes.
Prior to the Worcester sauce linked recalls, in the UK alone the food industry had recalled more than 280 food products for destruction- ranging from pesto sauce to chicken tikka masala - since July 2003 and enforcement of the European new measures.
While costs to the UK food industry are still unknown, they will include sales loss, destruction, recall, management time, public relations firms and consultants; plus the 'softer' costs such as the impact on a brand. But figures bandied around suggest the recall could hit as much as €143 million.
In today's complex food chain exposed to risk on a daily basis contaminated products insurance - not obligatory by law - could be an essential way to cover potential vulnerabilities.
But Marcos Garcia Norris, assistant vice-president crisis management division at insurer AIG Europe estimates that about 70 per cent of food and beverage firms do not have this type of insurance.
"Most of the large firms do, and the SME's are starting to, but overall we predict that about 30 per cent of food and drink firms have contaminated products insurance," he recently told FoodNavigator.com.