Experts are alarmed by the speed of the infection, already found in 52 formal gardens in the South-West and Midlands.
It is a close relative of so-called 'Oak Disease' - Phytophthora ramorum - which devastated California's oak population and has already infected hundreds of Britain's trees and shrubs.
Burning of infected plants has so far failed to control the kernoviae fungus, which was discovered in Cornwall in 2003 and since rampaged across the country.
The spread of the related ramorum fungus, first detected in 2002, has seen almost 800 trees felled in sites across England and Wales, according to Defra.
The disease has recently reached beyond gardens and woodland for the first time, by infecting native Bilberry bushes on heathland in Cornwall.
Jeff Rooker, minister for Farming and Animal Health said: ''Despite five years of emergency action, Phytophthora kernoviae and Phytophthora ramorum have continued to spread in the nursery trade and wider envirnoment.
"We now know that they have the potential to cause significant harm to businesses and the natural landscape, and we need to decide on a policy for future management."
Phytophthoras are the same family of fungii whuch caused the Irish potato famine, and there are fears the disease could devastate rural industries.
The National Trust has seen 14 of its gardens infected, and is urgently creating a living archive of rare shrubs and plants which may not survive.
As the disease orginiated abroad, experts fear rare British plant species, which have no natural immunity to it, may be wiped out.
The exotic rhododendron ponticum, imported from Asia by the Victorians, is widely blamed for introducing the fungii to the UK.
But once it has taken root in an area, the disease can spread rapidly through new 'host' plants, which could include common garden trees and shrubs.
A Defra consultation paper published this month warned that healthland, woodland and other habitats could be under threat for decades if the fungus is not controlled.