The move ends days of confusion over the issue and removes one of the few remaining potential obstacles to a deal that should lead to the lifting of the embargo on British beef.
Both France and Germany have been pushing for labelling that clearly marks the UK product, a move the Government has not opposed.
But a potential problem has been the European Union's single-market rules, under which member states cannot insist on compulsory consumer labelling to identify the country of origin of imported products. This is to stop one nation using the information to steer consumers away from products rivalling their own meat.
But yesterday the European Commission said that the word British could be allowed if it referred to the approved Date-Based Export Scheme under which small quantities of UK beef are being exported.
A statement said that this information - usually seen only by wholesalers - "can be made available to the final consumer, for example, through a mark like `British XEL [export eligible] beef'".
The EC statement said: "It should be noted that this information is not a simple mark of national origin but an indication that the meat has been produced in accordance with the Date-Based Export Scheme in force in the UK."
The move was seen in Brussels as a clever way of getting France and Britain off the hook without concessions on either side. It means that most of the outstanding difficulties between France and the UK have been resolved. A document summarising the agreement between the two governments and the commission has been sent to national capitals, and Paris is thought to be largely content with assurances over the treatment of cattle which come from the same cohort as any cow born after 1996 which contracts BSE.
The one outstanding issue appears to be British plans to introduce diagnostic tests for BSE. Jean Glavany, the French agriculture minister, has written to his British counterpart, Nick Brown, raising a series of technical questions. The Government welcomed the commission's comments on labelling and one official said: "This does not affect the way the scheme is applied but if it helps the French, so much the better. We have nothing to hide from the French consumer."
Mr Brown rejected any suggestion that concessions had been given to the French.
"It has always been the British Government's intention that meat going through the Date-Based Export Scheme would be clearly labelled to ensure consumer choice as far as we can and also to ensure that the product is traceable within the industry," he said.
But he refused to be drawn on when the French ban would be lifted. "We are making very good progress and I hope are able to get this settled soon. We are not setting timetables for other people. We are trying to get this resolved through discussion."
The Conservative Party was quick to attack what it said was a compromise that let down British farmers. "I very much regret that a further concession has now been made," the opposition spokesman, Tim Yeo, said in a statement.
Meanwhile, beef farmers converged on Downing Street to protest at the beef-on-the-bone ban - but were turned away at the gates. The group of around 20, led by NFU member David Ashcroft bearing an ox heart, carried placards saying:"Don't rip the heart out of the British beef industry".