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A four-day meeting of EU agriculture ministers also set about tackling reforms put forward by the European Commission to the Common Fisheries Policy (CFP), which has been blamed for sparking the present crisis.
The EU's executive arm says that after years of over-fishing, drastic changes are needed to prevent the total collapse of several species including cod, a culinary staple in Britain and Ireland.
Last week French fishermen brought chaos to the English Channel by blockading several ports in coordinated protests against the European Commission's proposals, with Belgian and British fishermen also demonstrating.
Fishermen from Belgium, Britain, Denmark, France, Ireland, Portugal and Spain dispute the commission's figures, saying the reform plans cut quotas too deeply and were drawn up without proper consultation.
But EU Fisheries Commissioner Franz Fischler said there was no alternative to both the quota cuts and another proposition that 8,600 trawlers be taken out of operation with EU aid.
"During this week we are at a true crossroads," he told reporters as the Brussels meeting got underway.
"These reforms are for the fishermen, because without fish, there will be no more fishermen," he said.
The commission also wants to replace the CFP's current system of annual quotas, which it argues prevents long-term planning to replenish fish stocks, with multi-year targets for catches.
Opposition to the plans is intensifying, with Irish Fisheries Minister Dermot Ahern predicting "a hell of a battle" and the industry warning of ruin for thousands of fishing communities.
In October a scientific report recommended closing all fisheries catching cod "either as a target species or as by-catch" in waters including the North Sea, Irish Sea and channels west of Scotland.
But last month Brussels admitted it was considering alternatives to a total ban.
The commission's latest proposals would slash cod quotas by up to 80 percent. They also call for a 40 percent cut in flatfish catches and a 10 percent cut in the industrial fisheries segment.
They also call for strengthened measures to police the new limits, including port inspections. The commission has complained that fish stocks are now so low partly because trawlers have routinely cheated in their catches.
The EU's executive arm wants to retire 8,600 vessels from the community fishing fleet from 2003 through 2006 at an estimated cost of 28,000 jobs. Sixty percent of those boats would be French, Italian and Spanish.
Fischler said he supported a compromise proposal by the EU's Danish presidency that for every 10 new trawlers weighing up to 100 tonnes built with EU subsidies, another 17 boats of equivalent tonnage should be retired from the fleet.
No new subsidies would be allowed from the start of 2005, the Danes proposed.
But a "friends of fishing" bloc in the EU - France, Greece, Ireland, Italy, Portugal and Spain - wants to maintain subsidies on trawlers until 2006.
French Agriculture Minister Herve Gaymard said he did not see "any significant new progress" in the presidency paper.
"If we stick to an ideological approach, I don't see how we can reach a compromise," he warned.