But the EU action, which comes amid a rising tide of consumer fears about the safety of GM foods, will for the first time ensure some consistency across the 15-nation bloc, analysts said on Friday.

EU governments on Thursday overwhelmingly backed plans for compulsory labelling for foods, where at least one ingredient contains more than one per cent of the GM material.

Officials have stressed that the plan would not give anyone the green light to label their foods as "GM-free". The definition of GM-free will be the subject of a separate plan still being drawn up by the commission.

"This is a major disappointment for us and a decision which will dissatisfy consumers all over Europe," said Joanna Dober, spokeswoman for EU consumers' lobby BEUC.

"Consumers want to be able to make choices based on clear and honest information. The threshold could have been lower and a number of major supermarkets are already using a lower level," she added.

The move was also sharply criticised by environmental campaigners, who say the one per cent threshold is too high and would allow for the sale of unlabelled food which, they say, is "contaminated" with GM material.

Most processed foods contain soya or maize, much of which has traditionally been shipped from countries such as the United States where GM crops are more widespread than in Europe.

Insult to consumers

"This decision is an insult to consumers. It creates no clarity but merely increases uncertainty," said Hiltrud Breyer, German Green Member of the European Parliament.

But industry representatives hit back, saying that, although the threshold was too low, at least the decision would fill a major gap in EU legislation.

Laws came into force in May 1998, requiring shops across the EU to label foods containing GM ingredients, but until now there has been no clear definition of what this means, explained Simon Barber of biotechnology industry association Europabio.

"Up to now, no one knows what non-GM really means. Now, for the first time, everyone has to observe the same levels," he said.

He said the agreement would also help the bloc revise its law on the approval of new genetically modified crops, which is currently working its way through the legislative process.

Calls for clear labelling

The EU ministers have called for clearer labelling rules and close tracing of crops from the field to the plate. "We've been waiting 18 months for some clarity, so the fact that a decision has been taken is a relief," said Dominique Taeymans, director at EU food industry lobby CIAA. "We would have preferred a two per cent threshold, but that's life."

Setting the threshold at one per cent for each ingredient is an attempt to accommodate the possibility of small traces of GM material entering the food chain during processing and manufacturing.

"I'd expect this to raise the value of identity-preserved products," Taeymans forecast, referring to crops which are certified as GM-free. "It could be pretty expensive to guarantee down to a one per cent threshold."

The EU has not approved any new GM crops since April 1998, amid growing consumer concern about the safety of foods derived from crops modified by biotechnology. The commission believes clear labelling would help to allay some of these fears.

The halt to approvals has raised the spectre of another damaging trade dispute with the United States, which has been angered by difficulties in exporting commodities to the EU.

The US officials gave the decision a cautious welcome, but stressed Washington remains sceptical of mandatory labels for products it does not feel present any risk.