When launching Minecraft and starting a new world, the game freezes & error dialog box "Java (TM) SE binary has stopped working"

When launching Minecraft and starting a new world, the game freezes within 5 seconds (sometimes less), and come up with "Java (TM) SE binary has stopped working" and program needs to be closed. Have downloaded the latest launcher (1.6.2) and reinstalled Java (version 7 update 25). Problem seems to have started with latest version of Minecraft with horses