Crunch talks on the future of the CAP will likely not yield an agreement this week.

Talks on revamping the EU's farming subsidy regime will continue on Friday, the European Commission said late on Thursday, as negotiators struggled to agree on rules to support small farmers and make the agriculture sector greener.

However, the European Council of Ministers meeting ended in the early hours of the morning with the Council stating that, although progress was made in several areas, a number of key issues remained outstanding. It was therefore decided to postpone talks until the next meeting of agriculture and fisheries ministers in June.

The EU is nearing the end of a three-year struggle to reform its Common Agricultural Policy (CAP), which will make up roughly one-third of the EU's 2021-2027 budget. The bloc plans to spend €387 billion on payments to farmers and support for rural development, with the new rules kicking in from 2023.

"It's not over yet with the super trilogue and we shall meet again tomorrow morning at 9.00," EU agriculture commissioner Janusz Wojciechowski said in a tweet.

The "trilogue" refers to the Commission's three-way negotiations with the EU member states and the European Parliament, who must both approve EU laws. The negotiations had been due to finish on Wednesday.

However, sources inside the meeting said yesterday if there were not major developments overnight, the hopes of a deal being reached would diminish.

Agriculture Ministers such as Ireland's Charlie McConalogue are under pressure from farm organisations to push back against further cuts to farmers direct payments.

McConalogue said he worked very hard to get an agreement, but it had to be one that worked for Ireland and Irish farmers and gave us the flexibility to allow the next CAP to have influence at national level and ensure that it works our national agricultural model.

Meanwhile, MEPs are under pressure to hold the line on its key demands fearing reduced environmental ambition in the deal would see the new CAP fail to pass a full vote of the European Parliament.

Portugal, which represents the 27 member states in the negotiations, on Thursday evening proposed compromises on unresolved issues, including how much cash to spend on "eco-schemes" to protect the environment, like organic farming or re-wetting peatlands to absorb CO2.

Agreement on the budget for these Eco-schemes remains among the sticking points with the Parliament last night rejecting a proposal that Member States on an 18pc funding floor for green payments.

The proposal also included rules to divert subsidies away from big landowners and businesses. It would require countries to redistribute 10pc of their CAP payments for farmers to smaller farms, although states can dodge this if they prove they will use other methods to distribute the funds fairly. The Parliament last night rejected the wording of this proposal.

European farmers and agri-cooperatives group Copa Cogeca said farmers would struggle to implement the CAP's environmental requirements, while receiving lower subsidies.

Climate campaigners have said the CAP would be toothless without firm targets to tackle the 10pc of EU greenhouse gases emitted by the agricultural sector.