In what is being considered as a major defeat for the biotech industry, European Union environment ministers rejected an appeal to force Austria to lift a ban on two biotech crop products.
Austria had earlier invoked a clause to prevent genetically modified crops from being grown on its territory.
The European Commission failed to muster enough backing for its third attempt to bring Austria in line. Of the 25 EU nations, only Britain, the Netherlands, Sweden and the Czech Republic backed its measure.
The EU is under pressure from the World Trade Organization to fall into line over its biotech practices.
Many EU nations continue to insist that genetically modified foods pose potential risks to human health and the environment and have been hesitant to embrace newly approved products. Trade rivals however feel that the Europeans are unfairly restricting their access to the European market.