The so-called "co-existence" law sets out rules to ensure conventional and organic crops are not contaminated by GM seeds, part of a web of European Union legislation aimed at allowing a controlled opening of the market to GM organisms.

But it will be up to each of Italy's 20 regions to set the detailed rules and most of them have said they want to remain GM-free, effectively maintaining an unofficial EU-wide ban on GM foods which was formally lifted earlier this year.

Agriculture Minister Gianni Alemanno, who sought jail time for farmers who broke the rules, said he was "very pleased" by the legislation's final passage in the Senate on Tuesday. It won approval in the lower house last week.

"We sought to... guarantee freedom of choice for Italian producers, while heading off the risk of diffuse and uncontrolled contamination by GM (organisms)," he was quoted as saying by ANSA news service. Roberto Gradnik, president of pro-bioindustry group Assobiotec, complained to local media the approval of the legislation was a step backwards.

"With this medieval-flavoured decision, our country denies to agriculture companies the freedom to choose to cultivate plants that are genetically modified," he said.

Any attempt to impose a blanket ban on GM farming would probably have prompted legal action from the European Commission, which has to ensure that use of such plants is allowed as long as they have passed safety tests.

Many European consumers and environmentalists fear the crops -- whose genetic makeup has been altered, often for resistance to pesticides -- might pose a hidden risk to health or wildlife.