BEIJING, Nov 1 (Reuters) - China's battle against fake and substandard drugs has taken an unusual twist with the discovery of a Web site masquerading as that of the country's food and drug watchdog.

The site was apparently set up to promote a diabetes medication, according to a report on government-run Web site china.com.

While looking very similar to the State Food and Drug Administration's real site (www.sda.gov.cn), it has a totally different address -- and was still functioning on Thursday.

"This site is definitely not for real," an official at the regulator was quoted as saying. "These lawbreakers have got some balls!"

The fake site (http://www.tnb163.cn/sdfs/index.htm) can be accessed from another purporting to be from a research institute promoting the miracle benefits of a new diabetes drug. But not only is that site a fake, the drug is too, the report added.

The link takes users to a false page on the watchdog's site which lists all the country's officially approved drugs, to give the impression that the drug is recognised.

Calls to the regulator were not answered.

China is in the midst of a crackdown on makers of shoddy drugs following a series of scandals at home and abroad which have tainted the country's reputation.

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