Successive attempts by Prime Minister Tony Blair's government, strongly backed by animal rights groups, to ban fox hunting have run into fierce opposition from rural campaigners and the unelected House of Lords.

MPs have voted for an outright ban several times but have been thwarted by the lords. In their most recent clash in March, the second chamber supported instead a "middle way" of licensed hunts which would pose curbs on the pursuit.

The sight of red-coated huntsmen riding after foxes with packs of hounds has been a traditional feature of country life for centuries.

Opponents say it is barbaric and cruel but supporters - including heir-to-the-throne Prince Charles and his sons - say it is an integral part of rural life and that thousands of jobs would be lost if it were outlawed.

One option for Michael would be to abolish completely hunting such as hare-coursing and stag-hunting but stop short of an outright ban on the hunting of foxes with hounds.

A government spokeswoman said he would try to steer a neutral path through the emotive and highly divisive issue.

"We're looking at a bill which deals with the principles and the evidence," she said. "The principles are cruelty and utility - is it useful, does it serve particular purpose, and does it mean hunting with dogs leads to the least suffering?"

Liberal Democrat MP Lembit Opik, who has lobbied for a compromise option involving licensing of hunts, said the debate which has raged since Blair took office five years ago had finally made some progress.

"Success for us would be a bill which leads to a regulatory solution which balances animal welfare considerations with civil liberties," he told BBC radio. "We favour an independent hunting authority that makes decisions across England and Wales."

All forms of hunting with dogs have already been banned in Scotland.