* Report says UK consumers "systematically duped"
* Finds suggestions of fraud on a massive scale
* Tesco, other retailers, "let consumers down"
* FSA, government caught "flat-footed" by scandal
By James Davey
LONDON, Feb 14 (Reuters) - Discoveries so far of horsemeat in products sold as beef are likely to be the "tip of the iceberg", a British parliamentary report into the scandal said on Thursday.
"The scale of contamination emerging in the meat supply chain is breathtaking," said Anne McIntosh, a legislator who chairs the cross-party Food and Rural Affairs Committee, which published the report. "More revelations will doubtless come to light in the UK and across the European Union."
Growing revelations about the use of horsemeat in products labelled beef have raised questions about the safety of the European food supply chain and prompted governments to send out a European Union (EU)-wide alert.
The EU's health chief said on Wednesday all companies that have handled falsely-labelled horsemeat were under suspicion, adding that the European Commission was considering strengthening EU rules on product labelling.
The British parliamentary report concluded there were strong signs horsemeat had been intentionally substituted for beef.
"British consumers have been cynically and systematically duped in pursuit of profit by elements within the food industry," it said.
The issue first came to light on Jan. 15 when routine tests by Irish authorities discovered horsemeat in beefburgers made by firms in Ireland and Britain and sold in supermarket chains including Tesco, Britain's biggest retailer.
Concern grew last week when the British unit of frozen foods group Findus began recalling its beef lasagne on advice from its French supplier, Comigel, after tests showed concentrations of horsemeat ranging from 60 to 100 percent.
UNABLE TO RESPOND
"While this is primarily a food labelling issue, the suggestion of fraud on a massive scale, suggests that measures must be put in place now to prevent any further contaminated meat entering the food chain," the report said.
It said Tesco and other major retailers had let consumers down by selling contaminated products, while regulator the Food Standards Agency (FSA) and the government had been caught flat-footed by the scandal and unable to respond effectively.
The report said the British government needed to find the right balance between affordable food prices and regulations that ensure transparency and quality.
It recommended the FSA be given statutory powers to require producers to undertake testing and wants the agency to undertake a broader spectrum of testing for products found to have the highest levels of contamination, to provide assurances they do not contain other non-bovine DNA or substances that could be harmful to human health.
It said all results must be reported to the FSA, whether mandated by the Agency or carried out independently.
"The consumer cannot be left to face a Catch-22 where they can either pay for food that complies with the highest standards of traceability, labelling and testing, or accept that they cannot trust the provenance and composition of the foods they eat," said McIntosh.