The Italian government on Wednesday said it would not go ahead with contested plans to test genetically modified versions of wine, olive oil and other Mediterranean crops.
Addressing parliament, Agriculture Minister Paolo De Castro said the environment ministry had refused to clear the proposed tests for "precautionary reasons".
"Given the lack of agreement on the procedures, the testing could not be authorized," he said.
De Castro also said Italy would consider appealing to the European Court of Justice if a request by a German firm to sell biotech potatoes in Europe was cleared.
Government plans to greenlight testing on genetically modified versions of Italian staples earlier this year prompted outcry among farmers and environmentalists.
The decision to grow trial crops in open fields further inflamed critics, who said there was a strong risk that organic produce would be accidentally contaminated.
The issue has been particularly explosive in Italy, which is the largest producer of organic crops in Europe and the fourth largest in the world.
Farmers' association Coldiretti estimated that organic farmers would see exports fall by around 60%, amounting to a six-billion-euro loss in profits.
The domestic market, in which 74% of Italians believe GM products are harmful to health, would also be badly affected, it said.
The decision to allow testing had marked something of a U-turn in Italy's previous policy on genetically modified organisms (GMOs), traditionally one of blanket opposition to biotech products in any form.
However, De Castro has on several occasions warned that an "overly rigid stance" on GMOs could hold Italy back on the international scientific stage, and advocated limited experiments in fields such as medicine, the environment and food safety.
Although the testing will not now go ahead, on Wednesday he once again called for a flexible approach on the issue.
He pointed out there were 27 countries in the EU and said "banging one's fists on the table" and raising barriers against the ideas of other member states would "not serve Italy's interests".
The minister's comments came a day after an alliance of Italy's largest consumer organizations, farmers associations and environmental groups announced a major new anti-GMO initiative.
The 25-strong coalition, called Italy-Europe: Free of GMOs, announced plans to hold a "national consultation" for two months starting in mid-September.
In addition to around 1,000 events nationwide, the movement will also seek to collect three million signatures expressing opposition to GM food.
