Environment Secretary Owen Paterson has vowed to fight for tougher moves to wean farmers off subsidies as part of a massive overhaul of Europe's costly agriculture policy.
After late-night talks in Brussels, Mr Paterson insisted that the future Common Agricultural Policy must centre on reducing EU support for the market and making the sector more competitive rather than being propped up by taxpayers.
He said he had successfully resisted bids from some ministers to extend the use of support for the market in a modernised CAP and added: "I'm pressing for further progress towards an open market that makes farmers less dependent on subsidies."
Last week, after a first vote on CAP reform by MEPs, lobby groups warned of a return to the "bad old days" of costly food mountains and lakes of unwanted wine and milk unless the direct link between subsidies to farmers and production is broken.
Now, after two days of talks between agriculture ministers, the stage is set for marathon joint negotiations steered by the current Irish EU presidency in the hope of a final deal in June.
Mr Paterson made clear he would continue fighting to "decouple" the link between farm subsidies and food production.
The biggest complaint about the CAP for decades was the way it encouraged food production regardless of demand because of a system of open-ended subsidies which simply generated warehouses full of rotting produce. Successive reforms have effectively ended the scandal - but the UK and a group of other countries say more must be done to make the sector self-supporting and competitive.
However, they were outvoted overnight when a majority of ministers agreed that the share of CAP cash subsidies linked to production should actually increase.
Mr Paterson said the UK, which had done most to decouple payments, would fight a move which would allow between 7% and 12% of subsidies from the farm budget to be continue to be "coupled payments".
"The UK and our allies are clear that coupled payments are part of the past," said Mr Paterson. "It's disappointing that the council proposed they continue, but today's agreement is still a clear improvement on the European Parliament's proposal for 15% or even 18%. We continue to fight for a common low rate."