The big supermarkets faced accusations of reaping unjustifiable profits from milk in the House of Commons last week.

The accusations came in a special debate on the crisis facing the dairy industry, during which Lib Dem MP Norman Baker submitted a petition demanding "a tough, legally binding supermarket code effective for the whole food chain, from farm to fork, to ensure supermarkets do not exploit suppliers, farmers or consumers".

The move, which was welcomed by a cross-party coalition of MPs, comes in the wake of hints last week from the Competition Commission that it was considering beefing up the supermarkets code of conduct to protect suppliers. It said in a working paper that the code had failed to stamp out many bad practices. Lib Dem MP Mark Williams said that retailers' recent promises of better farmgate prices were a sop to the Commission's grocery inquiry.

Westmorland and Lonsdale Lib Dem MP Tim Farron highlighted rapid rises in supermarket margins over the past five years. He reminded ministers that, in 1995, retailers' margin on milk was about 11%, but had now soared to 30%. "There is no market justification for that," he declared. "It can only be that supermarkets, apparently legally, are abusing their market power."

The chairman of the All-Party Parliamentary group on dairy farmers, Tory MP Daniel Kawczynski, issued an appeal to Sainsbury's boss Justin King: "You show such passion for telling your customers you want to pay Belizean and Caribbean banana growers a fair price.

"Why can't you show a molecule of the passion for our British dairy farmers?"

However, animal welfare minister Ben Bradshaw rejected calls for more Government intervention: "Pressure on farmgate prices is a fact of life.

"Dairy production occurs in a competitive market, so there will always be pressure on costs."