EU member states back compromise to allow GM crops-diplomats

* EU ministers set to vote formally in June

* New EU parliament to debate issue later this year

* Campaign groups say GM companies given too much power

* Biotech companies say decisions should be science-based (Adds German, British, French reaction, detail on new GM maize strain Pioneer)

By Barbara Lewis

BRUSSELS, May 28 (Reuters) - The European Union tackled deep divisions on genetically modified crops on Wednesday by striking a compromise pact that is likely to make it easier for them to win approval while allowing some countries to ban them.

GM crops, although widely grown in the Americas and Asia, have divided opinion in Europe with strong opposition in many countries including France and Germany.

The deal was welcomed by Britain, which hopes it could allow for more rapid approval of GM crops in the EU, and leading GM opponent France.

"This proposal should help unblock the dysfunctional EU process for approving GM crops for cultivation," Britain's farming and environment ministry said in a statement.

"We want a regime which allows GM crops to be grown when they have passed a robust, science-based safety assessment," the statement added.

France's agriculture ministry also welcomed the "good news", which coincided with a decision by the French constitutional court to uphold a domestic ban on GM maize.

Leading member state Germany praised the deal for allow opt-outs, saying it opened the way for a formal ban in Germany.

"The viewpoint of the people in Europe differs greatly on this matter and this earns respect," German Agriculture Minister Christian Schmidt said in a statement.

Wednesday's closed-door meeting almost unanimously supported the compromise, diplomats said, with only Belgium abstaining, meaning it is set to get formal approval at a meeting of EU ministers next month in Luxembourg.

After that it would need the backing of the newly elected European Parliament later this year.

Commission spokesman Frederic Vincent said the Commission was "cautiously optimistic", adding that a new law could be officially adopted either later this year or early next year.

TOO MUCH POWER?

Under the proposal, member states who disagree with GM cultivation have to ask the Commission to ask companies to exclude them from requests for authorisation for new crops, rather than directly approaching the companies.

A spokesman for Greece, holder of the rotating EU presidency, which put forward the compromise text, said the requirement that a member state has to make a request via the Commission would ensure maximum legal certainty, while still giving countries the right to refuse GM cultivation.

But environmental campaigners said it gave too much power to companies.

"Governments must be able to ban unwanted and risky GM crops without needing the permission of the companies who profit from them," Adrian Bebb, food campaign coordinator for Friends of the Earth Europe, said.

Representatives of the biotech industry were also unhappy with the compromise, which they said could allow crops to be blocked on "non-scientific grounds".

"To renationalise a common policy, based on non-objective grounds, is a negative precedent and contrary to the spirit of the single market," said André Goig, Chair of EuropaBio, the European Association for Bioindustries.

So far EU authorities have only approved two GM crops for commercial cultivation and one of them was later blocked by a court.

Earlier this year, European Health Commissioner Tonio Borg said he was legally obliged to approve a new strain of genetically modified maize Pioneer 1507, developed jointly by DuPont and Dow Chemical.

The approval is expected even though 19 of the 28 EU countries opposed approval because under the bloc's weighted voting system that was not enough to reject the crop.

A Commission spokesman on Wednesday said the Commission had yet to decide when Pioneer 1507 would be authorised.

(Additional reporting by Tom Koerkemeier and Francesco Guarasico in Brussels, Gus Trompiz in Paris, Nigel Hunt in London and Michael Hogan in Hamburg; editing by Jason Neely and Susan Thomas)