Ministers are facing calls from MPs for more testing of processed meat amid fears that beef products contaminated with horse meat could contain substances harmful to humans.

In a scathing report, the Commons Environment, Food and Rural Affairs Committee condemned the Government's "flat-footed" handling of the horse meat scandal, saying its ability to respond had been weakened by cuts to the Food Standards Agency (FSA). The committee said the public appeared to have been "cynically and systematically duped" for financial gain by elements of the food industry - raising wider concerns about the safety of the contaminated products.

"It seems improbable that individuals prepared to pass horse meat off as beef illegally are applying the high hygiene standards rightly required in the food production industry," it said. "We recommend that the Government and FSA undertake a broader spectrum of testing for products found to have the highest levels of contamination ... to provide assurances that there is no other non-bovine DNA or any other substances that could be harmful to human health present."

The warning came as EU ministers agreed on Wednesday night to the random testing of meat products for the horse anti-inflammatory drug bute as well as for horse DNA.

The committee was also highly critical of the way the Government had dealt with the scandal since the discovery last month of horse meat in a series of beef products sold by some of the country's biggest supermarket chains. "Whilst ministers are properly responsible for policy, the FSA's diminished role has led to a lack of clarity about where responsibility lies, and this has weakened the UK's ability to identify and respond to food standards concerns," it said.

"Furthermore the current contamination crisis has caught the FSA and Government flat-footed and unable to respond effectively within structures designed primarily to respond to threats to human health."

It called for the FSA to be given statutory powers to require producers to undertake testing, and warned ministers that they should not "at this time" propose to reduce the labelling standards applied to British food.

Committee chairman Anne McIntosh described the scale of the contamination in the food chain as "breathtaking" and warned that restoring consumer confidence would take time and money. The Government has a role to secure the correct balance between affordable food prices and effective regulations that require transparency and quality," she said.

For Labour, shadow environment secretary Mary Creagh said that report showed the Government was wrong to to cut back the FSA. "This damning report makes clear the Tories' reckless break-up of the Food Standards Agency in 2010 has harmed the Government's capacity to deal with the horse meat scandal," she said.

On Wednesday night EU agriculture ministers meeting in emergency session in Brussels agreed to random DNA testing of processed meat products. The meeting, attended by ministers from seven member states, also agreed to test for bute - a powerful horse anti-inflammatory drug which could pose a health risk if passed on to humans.