M&S has guaranteed its core lamb producers a mould-breaking base price of 240p/kg deadweight, beating an earlier commitment from rival Waitrose.

The retailer said it would also pay a premium of 35p/kg on top of the base price for carcases that hit the right specification and farms that stuck to extra welfare and environmental criteria.

It means some producers stand to earn 275p/kg for lamb supplied to M&S - about 30% better than current market returns of 208p/kg. The move is an extension of the retailer's two-month-old Lamb Pledge, which has so far been limited to a trial with 40 Welsh farmers. "Paying a fair price for our meat has always been our policy," said agricultural manager Rob Cumine. "We are rolling out our Lamb Pledge initially to farmers involved in our lamb breeding programme, with the aim of extending it to all our UK lamb farmers within two years."

M&S also said it would keep selling British lamb at selected stores into January and February - a period increasingly considered the early part of the New Zealand lamb season. The moves were praised by farming leaders, who have been campaigning for higher livestock prices.

"They've picked up the challenge that's been set and for that we must congratulate them," said NFU chief livestock adviser Peter King. "This is a good example of responsible retailing and will inject a measure of renewed confidence to farmers at this difficult time, giving them the confidence to plan for the future with secured assurance."

Marks' move follows a similar statement two weeks ago from Waitrose, which undertook to pay at least £2.30/kg for lamb until the end of the British lamb season in the new year. Unlike M&S, which is only paying the improved rates to 100 dedicated farmers, Waitrose is paying more for all the lamb it sells.

King predicted all the major retailers would make price commitments to livestock farmers over the next six months, saying there was a real appetite for change.