But these rules, which came into force in 2004, do not apply to meat and dairy products deriving from a GMO-fed animal.

For green groups opposed to biotechnology, this exemption is a glaring loophole in the EU's labyrinthine laws on GMO foods. But for the biotech and animal feed industry, it would be unthinkable and unacceptable to change the status quo.

The difference in opinion is just another illustration of Europe's deep-seated and often bitter divisions over GMOs. Since 1998, EU governments have been unable to agree over authorising imports of any new GMO crop or food.

Green groups say the key is what consumers know and want. Europe's shoppers are known for their wariness towards biotech foods, with opposition polled at slightly over 70 percent.

"People have the impression that everything is taken care of now that we have GMO labelling laws," said Geert Ritsema at Greenpeace International. "Consumers aren't aware of the problem ... what would trigger this labelling would be market pressure."

The European Commission, the EU's executive arm that drafts new legislation for national governments to debate and endorse, says there are no plans to tighten the rules on GMO labelling.

"The Commission believes this would be disproportionate. It's not on the agenda," one Commission official told Reuters.

NO PROBLEM, INDUSTRY SAYS

Europe's biotech and feed industries back the Commission line, insisting there is no evidence that meat or dairy products from a GMO-fed animal would qualify as genetically modified.

"Poultry that has eaten GM maize does not become a GM bird," said Alexander Doering, secretary-general of the European Compound Feed Manufacturers' Federation (FEFAC).

"There has been no scientific proof of any GM transfer to food tissue," he said. "Just by eating the stuff, the animal does not become genetically modified."

The potential cost, and logistical difficulties, to industry of tightening Europe's GMO labelling rules are also a factor.

One feed industry official, speaking on condition of anonymity, said such a move "would be a complete disaster" -- not only financially, but also because of the likely surge in consumer demand for products from animals fed with non-GMO feed.

The bulk of EU feed imports, mainly soybeans and maize, comes from countries like the United States where GMO crops are common through the crop supply chain. Around 90 percent of the EU's imports of GMO grain and oilseeds are used as animal feed.

Feed makers say the constant need to import high-protein feed materials makes it impossible to supply non-GMO feed on a large scale. However, there are tentative moves by some EU meat producers towards voluntary schemes to guarantee non-GMO feed.

Britain's top retailer Tesco Plc said it recognised the difficulty for its suppliers to guarantee meats that were based on non-GMO feed.