Under the rules, there must be a 150-metre gap between GMO crops and conventional crops to prevent cross-pollination. A 300-metre gap must be kept from fields with organic crops.

Changes in the minimum distances would be permitted if neighbouring farmers agreed.

Farmers growing GMO crops will be liable to pay financial compensation if neighbouring plantings are tainted with more than 0.9 percent GMO content.

The precise form of liability is still being examined.

Seehofer said on German radio that some form of insurance for GMO farmers was being considered.

The national register of GMO plantings would continue.

Germany's parliament is set to debate the draft law later this year. Seehofer said the proposals would create a legal framework for cultivation of and research into GMO crops which the EU has legalised.

German farmers' association DBV criticised the proposals, saying in a statement that the rules would be too complex and that a single unified buffer zone for conventional and organic crops was needed.

The DBV also criticised the lack of detail about financial liability. "Neither farmers nor the insurance industry has been given a sufficient basis for the calculation of possible liability," the DBV said.

The European Union has authorised commercial production of several GMO maize varieties.

But the lack of a legal framework in Germany has kept cultivation low. Official estimates show that only about 3,700 hectares of GMO maize was planted this year in Germany, up from 955 hectares in 2006.

The draft law was criticised by environmental pressure groups. The BUND said the buffer zones were too small and would permit uncontrolled cross-pollination of conventional crops.