"There's a risk (of prices rising) if Europe insists on having GM-free goods," the Frenchman told reporters.

The European Commission hopes the proposal will end a four-year ban on new GM food which the United States has threatened to challenge in the World Trade Organisation (WTO).

Martin also wants the moratorium lifted and supports consumer choice on the controversial issue. But he said labelling should be based on whether genetically-modified organisms (GMOs) can be detected in the final food product instead of catch-all labelling rules.

Under the proposals which EU farm ministers provisionally agreed in November 2002, all food and feed containing 0.9 percent of authorised GMOs would be labelled.

They set the labelling threshold for the accidental presence of authorised GMOs in food at 0.5 percent. The European Parliament is expected to debate this proposal in the first half of 2003, with final adoption hoped for the end of the year.

Martin said the planned procedure for checking the presence of GMOs in food will be cumbersome and expensive. This is because it is based on documents stating there are no GMOs present at every stage of the supply chain rather than a laboratory test.

"We're not against traceability, we're against basing labelling on a paper trail," said Martin, adding that the system is open to fraud. Environmental organisation Greenpeace rejects all these concerns and says the new system will be cheaper.

"Once the European traceability system is put in place, costs will decrease as the scattered supermarket controls will be harmonised," said Greenpeace EU Policy Director for Genetic Engineering, Lorenzo Consoli.