European Union finance ministers yesterday rejected demands from the European Parliament that the amount of money allocated to exports of live cattle should be cut by €31 million.

But, from next year, EU spending on export refunds for live cattle will be separated out from refunds for beef and veal, the ministers agreed.

Mr Tom Parlon, Minister of State at the Department of Finance, said he was satisfied that the Council of Ministers had maintained the principle that the Parliament should have no say on the Common Agricultural Policy's compulsory spending. "There is a strong element in the Parliament against live export of animals," he said.

In negotiations over the EU budget for 2003, the Parliament wanted the amount earmarked for live animal export refunds to be cut from €77 million to €46 million. Germany, which has a strong animal rights lobby, favoured a token cut. But Ireland, which is the fourth-biggest exporter of live cattle after France, Germany and Spain, held out against the cut.

"We made it very clear that a budgetary decision has nothing to do with a policy decision," Mr Parlon said.

The decision to create a specific budget line for live animal export refunds might lead in the future to greater pressure to cut spending, but finance ministry officials said that the spending was already separate and was only being made more visible.

Mr Parlon, a former head of the Irish Farmers' Association, said the live exports were essential to Ireland's beef farmers, who export 90 per cent of production.

Without the export refunds, EU farmers cannot compete with exports from Australia and Brazil.

This year, Ireland will receive about €5 million in export refunds for live cattle, out of an EU total of €54 million.