The phase five alert means that a pandemic is imminent and the disease can be spread from humans to humans in a sustainable manner reports the Financial Times.
The move came after the US reported the first death from the disease outside Mexico, where the new virus has killed up to 176 people though only a handful have been confirmed as stemming from infection.
Twelve countries have reported 150 cases of the H1N1 strain after Switzerland confirmed its first case on Thursday, saying a man returning from Mexico had tested positive. A three-year-old child in the Netherlands was also infected in the country’s first confirmed case, the Dutch ANP news agency reported.
Following the WHO announcement, Felipe Calderon, the Mexican president, ordered government offices and private businesses not crucial to the economy to stop work for five days from Friday to avoid further infections.
“There is no safer place than your own home to avoid being infected with the flu virus,” Mr Calderon said in his first televised address since the crisis erupted last week.
Mexico’s peso currency weakened sharply early on Thursday in response, falling 1.6 percent to 13.83 per dollar, but world stocks, powered by gains in Asia on Thursday, struck a four-month peak after the outbreak initially weighed on markets.
Texas health officials said a 23-month-old child on a visit from Mexico had died from the disease in a Houston hospital.
Rick Perry, Texas governor, issued a disaster proclamation for the state which has 16 cases of the disease. He said closing the Mexican border was an option but would be premature.
Ms Chan said: “The world is better prepared for an influenza pandemic than at any time in history.”
Speaking shortly before Ms Chan’s announcement in Geneva, Janet Napolitano, US homeland security secretary, said: “We’ve been preparing all along as if this is going to be stage 6. We are preparing for the worst and hoping for the best.”
The WHO said the new flu strain appeared to be spreading from person to person, with its dissemination exacerbated by international travel.
Read more here: WHO warns of ‘imminent’ flu pandemic