The decision was hailed as a victory for common sense last night after the French authorities were advised that English fans inevitably equated fencing with the Hillsborough tragedy, in which 96 people died.
Police in Toulouse and the CFO, the French World Cup organising committee, wanted to erect steel fences two metres high in the Stade Municipale to prevent English supporters running riot.
A decision on whether to put perimeter fencing in place was to have been made today, but it was brought forward following condemnation of the plan by Mr Blatter, the English FA and supporters' groups.
"Erecting fences would have the opposite effect," said Mr Blatter. "If you put up fences, you turn the fans aggressive."
Alain Bidou, the Prefect of the Haute Garonne region, with whom the final decision rested, had earlier indicated that he opposed fencing when he said: "Incidents involving hooligans have not taken place at games. We should not penalise ordinary English fans in possession of valid match tickets."
David Mellor, chairman of the Government's Football Task Force, welcomed the decision. "This is very encouraging," he said. "I am glad that common sense has prevailed."
Simon Inglis, editor of the "Guide to Safety at Sports Grounds", said: "It was an absurd idea in the first place. The advent of closed circuit television means that hooligans do not cause trouble inside grounds because they know they can be easily identified."
The FA earlier urged Mr Bidou to keep fences out of the 37,000 capacity stadium.
Up to 10,000 English supporters are expected in Toulouse for Monday's match and while there have been no reports yet of any trouble, groups of CRS anti-riot officers have reportedly been patrolling the streets as part of the city's high profile policing policy, adopted since Marseilles.
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