Minister for Agriculture and Food Mary Coughlan has signalled that the Government will oppose European Commission proposals to restructure the sugar market.

Ms Coughlan said yesterday that leaked proposals for reducing support for sugar production were "totally unacceptable".

Stressing that the formal proposal from the commission had not yet been released, Ms Coughlan conceded that the industry here faced what she termed "a difficult situation".

She told reporters that, with respect to Irish beet farmers who have complained about the proposed cuts, "we are both on the same side in this".

The commission's leaked policy on the sugar regime recommends cutting the white sugar support price by 39 per cent and the minimum beet price by 42 per cent. Both cuts would run over two years, starting in 2006/07.

An internal EU document, which was leaked on Monday, said that the Republic would be one of four EU countries which may see its sugar industry wiped out in a few years if the EU drastically cuts support prices and production.

It said that, as EU prices fell, growing sugar beet in Greece, Ireland, Italy and Portugal would quickly become less profitable than other crops such as cereals and oilseeds.

The leaking of the second report ahead of the formal announcement next week led to an emergency meeting of the Irish Farmers' Association's (IFA's) national council, which agreed to back its beet growers.

Jim O'Regan, chairman of IFA's sugar beet committee which represents the 3,700 growers in the State, said the proposals would wipe them out and were totally unacceptable.

"These cuts are a savage attack on an important component of the Irish tillage sector. The livelihoods of farm families are at stake and, if the European Commission intends to kill off an industry that's been in existence for over 80 years, adequate and proper compensation will have to be paid to beet growers who will suffer sever losses," he said.

Mr O'Regan also challenged the commission to help establish alternative, viable enterprises for the Irish tillage sector to overcome the damaging loss that would ensue if the cuts went ahead.

The industry here is still recovering from the shock closure of the Carlow Sugar Beet factory two months ago, which has created tensions not only between the growers and the Irish Sugar Company but between growers in Munster and north Leinster.