The decision is a breakthrough for environmentalists who have been campaigning for a ban for many years. Drift nets are legally used to catch tuna in the Mediterranean and parts of the Atlantic, but they also kill dolphin, swordfish and other marine mammals which get caught up.
Jack Cunningham, the fisheries minister who chaired the talks, hailed the decision. "I am very pleased that after long hard and tough negotiations we have achieved our objective," he said.
Britain pushed for drift nets to be banned as soon as possible but amid fierce protests from the Italian, French and Irish, whose fleets are most dependent on tuna fishing, ministers agreed the measure would take effect only from January 2002.
Some compensation will be paid out to the worst affected fleets to soften the blow and cover the cost of converting boats from nets to long-line fishing. But will be up to the European Commission to bring forward detailed proposals on cash compensation.
Mr Cunningham said that the licences for drift netters next year would be cut to only 40 per cent of those issued in the previous three years.
Britain has a small tuna fleet fishing mainly out of Newlyn in Cornwall. Geoff Bullis, a skipper who goes after tuna, hake and bass off the south of Ireland, travelled to Luxembourg to protest against the ban. He said that the Cornish fleet caaught only about half a dozen dolphin in total a year.
"This has got nothing to do with dolphins, it is about handing over our tuna fishing to the Spanish. I am particularly upset because we have an asshole for a minister who is leading the drive to close us down. I predict we will have no tuna fishery in Britain in four years' time," Mr Bullis said.
Spain, which converted most of its fleet from drift nets to long-line fishing some years ago, has been in the forefront of calls for a Europe ban - a cynical exercise, say rival fleets, to ensure that Spanish boats will enjoy a tuna monopoly which will bring prices up.
Britain had previously opposed a drift-net ban but Elliot Morley, the fisheries minister, switched camps after winning an exemption for Baltic Sea salmon and sea trout fishing.