BEIJING, Oct. 7 (Xinhua) -- The latest tests on Chinese liquid dairy products found no traces of melamine, the country's top quality supervision agency said on Tuesday.

    It was the seventh investigation on the chemical, which is often used in plastic and is banned in food manufacturing, following the tainted baby formula scandal that broke out last month.

    According to the General Administration of Quality Supervision, Inspection and Quarantine (AQSIQ), the latest tests covered 733 batches of liquid milk, including yogurt, from 76 brands in 22 major and four mid-size cities.

    At present, the agency tested 2,826 batches of liquid dairy products produced after Sept. 14 and found none tainted with melamine.

    Calling China's diary production and distribution "chaotic" and admitting government supervision was "gravely absent," the State Council, the country's Cabinet, is planning an overhaul for the recovery of the nation's dairy industry.

    At an executive meeting on Monday, State councilors noted the Sanlu baby formula scandal had been a major public health incident and tarnished the reputation of China's dairy sector and its food industry at large.

    The direct cause of the incident was illegal production, greed and ignoring people's lives, the State Council said in a statement.

    The meeting also approved draft regulations on quality control for dairy products. They stipulated stricter and detailed rules on animal husbandry, fresh milk collection, dairy production, domestic sales and the import and export of dairy products.

    The Sanlu Group, a leading dairy producer based in the northern Hebei Province, admitted on Sept. 12 it had found some of its baby milk powder products were contaminated with melamine.

    Contaminated baby formula has killed at least three infants and left more than 53,000 with urinary tract problems, including kidney stones. About 13,000 infants are still being treated in hospitals.

    AQSIQ had sent more than 5,000 inspectors to carry out round-the-clock scrutiny at dairy factories to restore consumer confidence in the wake of the scandal.

    Quality sample checks have been conducted on the products of other major brands including Mengniu, Yili, Bright Dairy and Sanyuan.

    Wang Yong, AQSIQ chief, told Xinhua the government would strive to ensure all dairy products manufactured after Sept. 14 were melamine-free and safe.

    In total, 437 food quality inspection institutions across the country had been certified by Sunday to conduct testing of melamine, a product used to cheat on protein tests of diluted raw milk, according to AQSIQ.

    The Ministry of Health dispatched more than 1,600 medical teams, involving more than 8,000 people, to deal with the problem. More than 4,500 medical institutions nationwide helped with the tests.

    Those responsible for the contamination, including producers, traders and officials, should be penalized in accordance with the laws and regulations, the State Council said on Monday.

    So far, at least 27 people have been arrested over the scandal.