The G8 summit in Cologne agreed to set up two international committees to look at food safety standards during a discussion on "global threats", which include Aids and the millennium bug. The move marks a retreat for Tony Blair, the Prime Minister, and US President Bill Clinton, who have consistently defended GM crops.
They were bounced into agreeing to the establishment of the inquiry by Jacques Chirac, the French President, and Gerhard Schroder, the German Chancellor, who have taken a more sceptical stance towards growing the GM crops on their soil.
The initiative was welcomed by environmental campaign groups, which have called for a five-year moratorium on growing GM crops in Britain.
However, questions remain about whether the G8's statements of intent will be translated into action. The French, who have banned some GM crops from being grown, originally put forward stronger proposals for action against genetically modified crops but these were later watered down.
The leaders agreed only to put in train the mechanisms for setting up an international committee of inquiry, rather than moving to an investigation immediately. The Paris-based Office for Economic Co-operation and Development (OECD), the developed nations' club, will now set up two technical committees to review research into genetic modification.
Charles Secrett, director of Friends of the Earth, said the inquiry put Mr Blair, who has been resisting pressure to ban GM crops, "on the back foot".
And he warned that any inquiry must be independent, without interference from powerful biotechnology interests, and that its final recommendations must be acted on.
"This is another tangible demonstration that the world leaders who have been most behind GM technology have got it wrong," he said. "But we have to make sure that this is not a smoke screen. We need to see who is on the committee and what its frame of reference is."
Earlier this month there were signs that Downing Street was softening its public defence of GM foods and listening more closely to consumer concerns.
The two OECD committees will be asked to gather scientific evidence on the environmental effects of growing genetically modified food and possible health risks from eating it. This will form a database for each country.
They are expected to collate information about the dangers of using antibiotic- resistance marker genes in GM crops which, studies show, could lead to the build up of resistance to vital penicillins in humans.
They will also look at the latest studies on the danger of cross-pollination between GM and ordinary crops growing nearby. Ecologists have argued that there needs to be more testing of the dangers to the environment. Farm-scale trials are currently under way in Britain and commercial planting could begin as early as 2001.
Chancellor Schroder used his political might as head of the G8 host nation to ensure that GM food was on the agenda.
But the initiative came from President Chirac, who wrote in a letter to Schroder that: "Many of our difficulties stem from the absence of an independent global scientific authority, capable of giving reasoned advice on new products or procedures.
"I intend to propose at Cologne that we study the creation of an international scientific high council ... I am convinced that with such a body we would considerably improve the reliability of the international system."
The Independent on Sunday has campaigned for a moratorium on the commercial growth of GM crops until the results of field-scale trials and other scientific tests have been fully evaluated.