The minister in charge of the foxhunting bill has signalled the government may be set to agree a compromise.

Rural affairs minister Alan Michael has admitted that hunting with hounds "is necessary" in some in some parts of the UK to protect livestock and should not be outlawed.

The minister, who has been ordered by Tony Blair to shape the government's foxhunting bill, said the pastime would have to pass a "utility" test.

"There are certain things that are necessary to be undertaken particularly in a rural environment - for instance, the protection of livestock, making sure the predation of lambs is kept under reasonable control, and keeping population numbers under control," he said.

"What I mean by utility is. does it stand up to the question of whether this is really necessary? If it does, fair enough."

His comments came as countryside campaigners begin their final preparations for a mass march on Westminster at the end of the month - and claims from militant members of the pro-hunt lobby that they are prepared to take direct action against key national targets.

His comments will infuriate the majority of Labour MPs, such as Tony Banks, who voted by a massive majority to see hunting with dogs banned.

Michael also dismissed as "inconclusive" a report out last week which claimed fox numbers had not been affected by the ban on hunting imposed because of the foot and mouth ban.

He said hunting supporters had claimed that alternative culling methods had been used to keep the fox population in check.

Michael robustly sought to take on opponents on both sides of the divide with warnings that his solution would be likely to please nobody and that attempts to challenge his legislation would be fought off.

Attempts to use the Parliament Act to amend a government bill by anti-hunting MPs were described as "irresponsible, inaccurate and totally misconceived".

"It is very unlikely indeed I am going to be able to wave a magic wand and produce a set of recommendations that any group will be able to say, 'We 100 per cent support it'," he warned.

"My job isn't to produce something that will make everybody happy. My job is to produce a set of proposals that will stand the test of time and make good law."

He also signalled a bill was weeks away and had been scrutinised to prevent it being fought over in the courts.

"The objective is to create good law and good law is something that doesn't end in people spending a massive amount of time in the courts, that doesn't appear draconian but does have sufficient teeth to encourage those who aren't inclined to obey the law to think twice about disobeying it," said Michael.