The Government tonight pledged to "stand firm" to maintain an opt-out to the Working Time Directive after a committee of Euro MPs, including a Labour member, voted to scrap it.
The move by the employment and social affairs committee of the European Parliament sparked a fresh row between business leaders and unions in the UK over the directive, which aims to limit the working week to 48 hours.
Union officials said it was a "significant" blow against the UK's long hours culture, but business groups said ending the opt-out would "constrain" firms, especially as they struggled to cope with the economic downturn.
Labour MEP Stephen Hughes, employment spokesman of the Parliament's Socialist Group, was among the 35 who voted in favour, with 13 against ending the opt-out, which was negotiated by the former Conservative administration in 1993.
Mr Hughes said: "It has always been the position of the Socialist Group to be against the opt-out on working time because of concerns about health and safety. As the policy co-ordinator for Employment and Social Policy for the Socialist Group in the European Parliament it is my job to make sure the Parliament will vote to end the opt-out on working time. Of course it is now up to the European Parliament and the Council to negotiate a compromise acceptable to all."
The issue will now be debated by the European Parliament next month.
Unions inflicted a defeat on the Prime Minister at Labour's party conference in September by forcing through a motion calling for an end to the opt-out.
Paul Kenny, general secretary of the GMB union, said: "This is a very significant day for UK workers. Dignity and decency has won over ignorance and greed. There are a number of steps to go yet until the opt-out is ended and GMB will be lobbying to ensure the vote in the European Parliament in December goes the same way."
TUC general secretary Brendan Barber said: "Regularly working more than 48 hours increases the risk of suffering from heart disease, stress related illness, diabetes and other ailments.
"The vast majority of long-hours workers want to move to a better work-life balance and are hungry for change."
But John Cridland, deputy director general of the CBI, accused the MEPs of being "out of touch" and called on their colleagues to support the opt out during next month's debate.
"People in medical research can work longer if they wish. The proposals would end this, replacing freedom with frustration.
"We think people can look at their own circumstances and make their own decision about working longer hours. We call this common sense, and it doesn't need amending by Brussels."
David Frost, director general of the British Chambers of Commerce, said: "Abolishing the opt-out will constrain businesses at a time when they are key to lifting the UK out of recession. It could mean lower earnings and lower living standards for many workers."
Alistair Tebbit, head of EU and employment policy at the Institute of Directors, said: "MEPs have made a big mistake. As the EU enters recession, employers need more flexibility, not less."
Conservative MEP Philip Bushill-Matthews called on the Government to "give no ground" to the employment committee and said his party would now work to secure enough support for retaining the opt-out.
"During a recession we should be encouraging hard work, not outlawing it, and enabling personal choice rather than restricting it," he said.
Business Secretary Lord Mandelson said: "The decision by the employment committee is not surprising in the least. We will continue to stand firm to protect the opt-out to the Working Time Directive's 48-hour maximum working week, which is essential to Britain's labour market flexibility that has helped to create an extra three million jobs over the past decade.
"People must remain free to earn overtime if they wish and businesses must have the flexibility to cope during busy times.
"To lose the ability to opt out will mean workers cannot boost their earning potential when some are already struggling with high food and energy prices."