It is true that the 'Novel Foods Regulation' (Regulation (EC) No 258/97) lays out detailed rules for the authorisation of novel foods, ingredients and processes. However, this regulation does not cover foods from cloned animals.
The law is in the process of being amended at the European level. Here are three separate amendments taken from the Second reading of the new draft Regulation on Novel Foods: 
(2c) The European Parliament called on the Commission, in its resolution of 3 September 2008 on the cloning of animals for food supply, to submit proposals prohibiting for food supply purposes (i) the cloning of animals, (ii) the farming of cloned animals or their offspring, (iii) the placing on the market of meat or dairy products derived from cloned animals or their offspring and (iv) the importing of cloned animals, their offspring, semen and embryos from cloned animals or their offspring, and meat or dairy products derived from cloned animals or their offspring.
(6a) The cloning of animals is incompatible with Council Directive 98/58/EC of 20 July 1998 concerning the protection of animals kept for farming purposes, point 20 of the Annex of which states that natural or artificial breeding procedures which cause or are likely to cause suffering or injury to any of the animals concerned must not be practised. Food from cloned animals or their descendants must therefore not be placed on the Union list.
(7) The European Group on Ethics in Science and New Technologies stated in its Opinion (No. 23) of 16 January 2008 on ethical aspects of animal cloning for food supply that it ‘does not see convincing arguments to justify the production of food from clones and their offspring’. The Scientific Committee of the European Food Safety Authority (EFSA) concluded in its Opinion of 15 July 2008 on animal cloning that ‘the health and welfare of a significant proportion of clones … have been found to be adversely affected, often severely and with a fatal outcome’.These amendments clearly show that European Executive does not intend to authorise the use of cloned animals in food production. This regulation would be binding on the United Kingdom. But in the interim the FSA is left to deal with cloned animals being brought into the food chain with no specific law to deal with it.  It is commendable that the FSA has seen that cloned animals have been taken out of circulation, but I would argue that it is not entitled to authorise the use of cloned animals for food production. Hopefully these incidents will accelerate the proper ban on cloned animal foods and food ingredients.
1. FSA Update on Cloned Animals, 4 Aug 2010
The FSA claims that foods produced from cloned animals fall under Regulation (EC) No 258/97 (the ‘Novel Foods Regulation’). FSA Cloned Animals
2. Article 1 of Regulation (EC) No 258/97 sets out the definition of novel foods that is currently in force. Regulation (EC) No 258/97
Novel foods or novel food ingredients include:
2) from GMOs
3) molecularly altered
4) isolated from micro-organisms, fungi or algae
5) “foods and food ingredients consisting of or isolated from plants and food ingredients isolated from animals except for foods and food ingredients obtained by traditional propagating or breeding practices and having a history of safe food use”. Although this wording is broad and probably the basis for the FSA’s claim of authority to allow cloned animals for foods into the market despite the concerns mentioned above, it only refers to food ingredients from animals, not foods. Milk and beef from cloned cows are foods, and therefore, not covered.
6) processed foods
3. European Parliament, The Legislative Observatory, Procedure File, Novel Foods, Second Reading, http://www.europarl.europa.eu/oeil/file.jsp?id=5583302
4. "Since 2007, the Food Standards Agency’s interpretation of the law has been that meat and products from clones and their offspring are considered novel foods and would therefore need to be authorised before being placed on the market." FSA Statement on Cloned Animals and their Offspring