The European Parliament has voted to scrap Britain's opt-out from the Working Time Directive and to limit workers to a 48-hour week.

MEPs in Strasbourg voted by 378 to 262 to tighten the rules on working hours in the interests of health and safety, despite protests from the British Government. British Labour MEPs were among those voting to reform the law, in defiance of Tony Blair.

The result of the vote was greeted with cheers by MEPs - but it is seen as unlikely to survive once it goes to member states on the EU Council for approval.

Britain intends to put together a blocking minority of several countries to overturn the result and preserve the opt-out. Former communist countries from eastern Europe who have recently joined the EU are understood to oppose stricter labour laws. EU employment ministers will give their first verdict on today’s vote at talks next month.

"We are disappointed. We believe the working time opt-out is important for several member states. It allows choice for individuals and gives flexibility to labour markets," a British spokeswoman said.

"It will only be agreed if parliament, the member states and the Commission can agree on the same version."

The opt-out was won by John Major 12 years ago and has been a bone of contention in Europe ever since. Last year Stavros Dimas, then Employment Commissioner, announced moves to end the opt-out.

Britain alone uses it freely, allowing workers to exceed 48 hours week in any sector of work if they reach a signed agreement with employers. Other countries, including Germany, France and Luxembourg, also allow the use of the opt-out, but limit it to certain sectors and industries.

The row has pitted the European Trade Union Confederation against the Confederation of British Industry, with ETUC leader John Monks insisting that Britain's long hours culture was damaging not just the health and family life of British employees, but also their productivity.

"Hourly outputs are low compared to some other European countries and we have to raise our game a bit to work a bit smarter and work a bit less," he told BBC Radio 4’s The World At One.

The changes put forward by Alejandro Cercas, a Spanish socialist, and backed today by MEPs, are compromise proposals which would see the opt-out phased out slowly, and allow employers to average out the 48 hour week over 12 months rather than the present four months.

Brendan Barber, the TUC general secretary, welcomed a "victory for common sense", said that only the two million British workers putting in extremely long hours all year round would be affected by the change.

But David Frost, Director General of the British Chambers of Commerce, called the vote a blow for business and for Europe’s future prosperity. "It flies in the face of the EU’s decision to focus on growth and jobs and sends a strong message that the European Parliament is not interested in improving Europe’s competitiveness. We urge the UK government and other EU leaders to reverse the decision."

Sir Digby Jones, director general of the CBI, said: "Germany and France want Britain to lose this because we have a more successful economy and they’re trying to break our leg."

Attacking the Labour MEPs, he said: "We are trying to be more competitive against India and China and they seem to be marching valiantly towards 1970."

The Tories taunted the Prime Minister over the fact that his own party's MEPs had disobeyed the Government line. Liam Fox, the Shadow Foreign Secretary, commented: "Once again, we get one message from the Labour leadership and another from Labour’s elected representatives. Are they on the side of Britain or our competitors?"

But Labour MEP Stephen Hughes, spokesman on employment, was unapologetic this afternoon about opposing the Prime Minister’s support for the opt-out.

"I think it is wrong for the UK Government to want to retain the opt-out. I am full of praise for many of the things my Government has done in this area but this is one point on which they have been dragging their feet."

Recent research for the TUC showed that almost four million people worked more than 48 hours a week, with 2.4 million of them receiving no overtime payment. According to the TUC, two-thirds of British workers who work more than 48 hours have not been asked to opt out, and one in four were not given a choice about doing so, even though it is illegal.

Times Recommends

• Heed the great stabiliser’s words
• How a voice for everyone led to stalemate
• Bakara market becomes a slaughterhouse