Labour MPs have vowed to press ahead with a ban on fox-hunting despite a climbdown by the government.

Ministers are facing a major rebellion by backbenchers over a new hunting bill which falls short of an all-out ban.

Alun Michael unveiled proposals to restrict hunting with hounds and ban stag hunting and hare coursing outright.

But legislation will licence local hunts which pass "utility and cruelty" tests.

The tests were a "golden thread" that ran through the entire bill, the rural affairs minister told MPs.

Following stiff opposition to an outright ban in the House of Lords, Michael said he hoped that the parliament act would not have to be invoked if peers backed the compromise licensing approach.

He praised both sides of the hunting lobby saying they had assisted his inquiry in a "mature and intelligent manner".

He also told MPs that there were no plans to ban angling and shooting.

Cruelty tests will be decided by a tribunal which will agree licences on the grounds of a need for pest control.

A key principle would be "what is necessary to prevent damage to crops or live stock with the least cruelty".

"The onus is now on the people that want to carry out these activities to meet the tests," said the minister.

"Nobody has a right nor should they have a right to subject animals to unnecessary suffering on animals."

People who hunt illegally will face criminal prosecution for animal cruelty or breaching the conditions of their licence.

Michael warned that the status quo was not possible in what was a difficult issue.

He insisted the government had struck the right balance.

"There is no magic wand there is no quick win. I believe these proposals will stand the test of time and that they are right," he said.

Downing Street had earlier signalled its support for the approach.

Number 10 said Michael's proposals were a "serious and rational way" to deal with a situation where there were "conflicting views".

"Clearly it is one of those issues where the House has strong views," said Number 10.

Whilst Number 10 would not confirm how the prime minister would be voting on the recommendations, officials said "no-one should downplay" the very serious consultation exercise which had resulted in the blueprint.

"This is a serious attempt to find a rational way forwards," said the official spokesman.

For the Conservatives, David Liddington, claimed that Michael did not have enough support to get his plans into law.

"Isn't it the truth that Labour members are not going to let the minister get away without a ban, golden thread or not?" he asked.

He argued the plans were a threat to liberty that would also be a burden on overstretched rural police forces.

"It is surely crazy that the government should place a statement on the hunting with hounds above the crisis in A-level examinations," he said.

Labour MPs, who have demanded a total ban, accused ministers of attempting to over-ride the will of the Commons.

"It is a silly attempt to have it both ways. As far as we are concerned it is a ban, a total ban and nothing but a ban. If Alun Michael thinks we are going to accept this then he is more mistaken than we feared. He can forget it," said one.

Tony Banks, one of the most outspoken anti-hunt MPs, said the bill was welcome, but insisted that the will of the House of Commons must prevail.

He is seen by colleagues as the standard bearer and will attempt to amend the legislation to secure a total ban.

"We need to listen very carefully to what the minister is going to say. In my opinion, we are going to get something like 95 per cent of what's being asked.

"If the opinion of the House of Commons remains as it was on the last Bill for a total ban, then that's exactly what will happen."

But MPs who backed the Middle Way option said the announcement was a victory for common sense.

Lembit Opik conceded that many Labour MPs may rebel over the plans, but urged them to back a compromise between animal rights and civil liberties.

And he warned ministers that national system of regulation would be far preferable to a system of local tribunals.

"Any decision has to properly balance animal welfare with civil liberties, without causing confusion by seemingly stating that the same act is cruel in one area but not another," said Opik.