Britain will attempt to "moderate" EU calls for 80 per cent cuts to fishing quotas, the prime minister has said.

Tony Blair told MPs that action to preserve fish stocks from over-fishing was necessary to preserve the industry.

"If fishing continues at the present rate there is a risk of there being no viable cod fishing industry left," he told the Commons.

Over the last 30 years Europe's cod stocks have plummeted from 250,000 tons to 35,000 tons - and scientists believe the safe level is 150,000 tons.

The fishing crisis has led to calls for sweeping cuts from Brussels chiefs, revealed Blair.

"The European commission has suggested a reduction in fishing of 80 per cent in order to allow the cod stocks to recover to its minimum viable level," he said.

"We share the objective of enabling the fish stocks to recover but we believe much more moderate measures could still deliver recovery while still maintaining a viable industry."

Heated talks at the weekend's Copenhagen summit have led the Danish EU presidency to put forward a compromise proposal.

"There's a strong will to reach an agreement, but it's no secret that there are many divided opinions on the proposals put forward by the commission," said Danish fishing minister, Mariann Fischer Boel on Monday.

"So we have now put forward a compromise proposal based on the very thorough discussions we have had in plenary, and on a long round of bilateral meetings, which we have held."

"The compromise lays out a reform, which among other things contains multi-annual measures for the recovery of threatened stocks, a reduction in overall fleet capacity, and strengthened co-operation on control."

UK fisherman have already received £36 million in economic assistance, and in Scotland £27 million has been earmarked for long term fish stock preservation.

Pledging to meet fishermen in the New Year, Blair promised that extra financial assistance will be made available if necessary.

"If there are further cuts arising from the ongoing negotiations in Brussels, the UK government and the Scottish executive stand ready to help the fishing communities affected," he said.

In a heated Commons exchange, Iain Duncan Smith accused the prime minister of failing the fishing industry.

"With 40,000 jobs at stake on the basis of a contested scientific report Britain's fishing community surely deserves better," he said.

The Conservative leader called on Blair to do more to protect the industry, and demanded "more than talking tough before meetings and then backing down afterwards".

"What they got from their British government, it seems, is full acceptance of that further savage cuts will be necessary. Why didn't he force the discussion of the fundamental issues of the CFP onto the table as would have been required?," he said.

European fisheries ministers were meeting last night in a make or break attempt to determine fishing quotas.

The European commission is proposing "significant cuts" in several fish quotas including cod, haddock and whiting.

Industry has been given a stark warning that stocks will die out altogether unless swingeing cuts are imposed.

"The choice facing us is stark but straightforward: either we do our best to secure the future of our fishing sector by taking measures that will undeniably impose pain in the short-term or we postpone them once again until, inevitably, one fish stock after another collapses with all the attendant consequences for the sector," warned fisheries commissioner Franz Fischler.

"I trust that the council will take the necessary decisions."

But the meeting has already prompted an angry response from the fishing industry.

British, Irish and French fishermen yesterday held an angry protest against any reduction in cod quotas

It is claimed that a further reduction in fishing quotas could result in the loss of 20,000 in the Scottish fishing industry.

Environment secretary Margaret Beckett and fisheries minister Elliot Morley will be joined by their Scottish counterpart Ross Finnie at the week-long meeting.

The SNP last night challenged ministers to reject attempts to impose significant reduction on fishing quotas.

"They must ensure no draconian measures are imposed and the quota is secured to allow the fleet to go back to sea," said shadow fisheries minister Richard Lochhead.

"A breathing space could then be used to allow a carefully prepared management plan for fish stocks to be brought back in due course to Europe."

The current crisis in fish stocks was identified last year when the European commission warned that stocks of cod and haddock had reached all-time lows in some waters.