Environment Secretary Caroline Spelman has insisted that the Government did not support "dogmatic" scrapping of subsidies for farmers in the near future.

But Meriden MP told the National Farmers' Union that she could see a time when the current levels of support for food production would not be required.

Speaking at the NFU annual conference at the Hilton Birmingham Metropole, near the NEC, she said farmers they had a key role in growing more food at less cost to the environment.

Questioned on the Government's stance on the review of the European Common Agricultural Policy (Cap) which provides payments directly to farmers - as well as providing a separate stream of funding for looking after the countryside - she said: "Obviously farmers need these direct payments, we recognise that."

She said the previous government's policy of looking for the scrapping of direct subsidies forthwith was "unrealistic and incredible" and had left the UK sidelined in European negotiations about the future of agricultural subsidies.

Ms Spelman said farmers would continue to need the payments until world prices were high enough to ensure they did not require support.

But she said: "A time is coming - but we don't know how soon - when levels of subvention we have to today will not be required."

She said she wanted to see reform to the Cap that helped farmers become more market-orientated, opened up markets and rewarded farmers for the environmental benefits they deliver.

However she also warned: "With finance ministers trying to balance their nation's books, there's bound to be downward pressure on the Cap budget."

National Farmers' Union president Peter Kendall said that farmers were "profoundly worried" about the Government's approach to the European system of subsidies.

Mr Kendall said direct payments were essential to make sure farming was viable, and that while farmers wanted to be less reliant on public support, they were not there yet.

He also warned the Government that its localism agenda, putting more power into the hands of local communities, could put the brakes on development that would help more food production.

State-of-the-art polytunnels for soft fruit, glasshouses for vegetables, low carbon and high welfare livestock units could all be at risk from "nimbyism" if the Government did not put food production as one of its priorities in the new planning framework.

He called for urgent concrete action on the promised groceries code adjudicator, which has been pledged to make sure farmers get fair prices from the big retailers - demanding that there should be "fines that hurt for abuses that hurt".

And he warned milk producers were being squeezed out of existence by dairy price wars by processors and retailers.

He called for ministers to back EU proposals for the dairy industry that were a step towards "stopping the exploitation of so many dairy producers and their families that's happening right now".