Environment minister Michael Meacher has said that organic and conventional farmers should have the right to compensation if their crops are damaged or made unsellable by cross pollination from neighbouring GM fields.
Speaking at a conference exploring whether commercial GM crops should be introduced into Britain, he said the absence of a legal right of redress had to be addressed before production began.
"We need to consider how best to protect the interests of all farmers, including organic farmers," he said.
"Our approach to GM must be compatible with the government's ambitions for the expansion of organic farming: to increase the UK's market share of organic produce sold in the UK from 30 per cent to 70 per cent. We need to consider the terms upon which GM and non-GM production might co-exist. This might include establishing separation distances to limit cross-pollination."
At present farmers who choose to grow genetically modified crops have no liability if they damage a neighbour's livelihood. Meacher said this could not continue and the government was considering changing the law.
The conference was organised by Genewatch UK, in association with the Guardian, Unilever, the Elm Farm Research Centre and the campaign group Five Year Freeze.