Farming leaders are furious the Cabinet has been told a greater share of EU agriculture subsidies will be spent on environmentally friendly land management.
The Government has indicated it wants to transfer 15% of direct payments given to all farmers – based on acreage – to environmental and rural development measures such as building dry stone walls and creating habitats for wildlife.
Now the decision appears to have been firmed up amid claims Department for Environment, Food and Rural Affairs ministers have made the recommendation to Cabinet colleagues, so that the Government's decision can be communicated to the European Commission by the end of the month. The current transfer rate is 9%.
National Farmers' Union president Peter Kendall said: "Farmers remain at a complete loss to understand what the Government intends to use this money on, or how it can be used effectively for the benefit of their businesses."
Some £20 billion of subsidy will be dished out to British farmers over seven years to help uneconomic but vital farming.
The Environment, Food and Rural Affairs Select Committee of MPs last week warned the switch will "penalise" British farmers.
Mr Kendall added: "The threat of disproportionate reductions in farmers' payments vis-a-vis their immediate competitors (France and Italy will see payments rise from 2014) is making them angry and frustrated with this Government."