An overnight agreement on reforming the Common Agricultural Policy has been described as a “watershed moment” by Minister for Agriculture Simon Coveney, who chaired the two days of talks in Brussels.

He said the deal gave him a strong mandate to finalise a package with the European Parliament, even though two countries - Slovenia and Slovakia - declined to sign-up to the final text.

The Irish Farmers Association has given a cautious welcome to the deal, but a spokesperson said the reforms will hit the most productive farmers in Ireland the hardest.

Meanwhile, the European Commission has indicated that some aspects remain unacceptable.

Mr Coveney said it was difficult to overestimate the scale of the achievement in reaching a deal on CAP reform, but he also accepted that securing the backing of MEPs before the end of June is a challenge.

Addressing Irish concerns, Mr Coveney said he was particularly pleased to note ministers abided by the principle of flexibility in the way in which single farm payments are to be distributed within Member States - something he maintained was a significant advance on the Commission proposal for a flat-rate payment per acre.

He also expressed happiness that Irish compromise proposals had been accepted on what is called the ‘greening’ of direct payments, in other words making EU money linked to environmental best practice.

The Irish Farmers Association said retaining those flexibilities at national levels should be very important goal for Mr Coveney when it came to upcoming talks with the European Parliament.

The Chairman of the IFA's National Livestock Committee, Henry Burns, said good progress has been made, but Mr Coveney still had a lot of work to do in order to get the proposals passed.

"I suppose a more moderate proposal that will help some productive farmers survive is there but remember we are looking at a decreased budget and there are huge transfers happening here with money away from farmers that are active,” he said.

“There's no huge win here. There's a long way for the Minister to go to get this across the line."

However the IFA claimed the European Commission was becoming more isolated in its demand for the flattening of payments to farmers.

For its part the European Commission praised the Irish EU Presidency for securing agreement on CAP reform.

However it stated bluntly that a number of elements in the package remain unacceptable - in particular the absence of a speedy move towards common area payments.