The Commission is planning to bypass red tape and speed up cash aid for fleets, to encourage a switch to more energy-efficient and environmentally friendly fishing methods.

There will also be emergency aid for trawlermen who volunteer to halt fishing temporarily, and EU market support to boost fish prices.

But the measures do not answer the plea of fishermen – and the transport sector – for a cut in fuel taxes to ease the pain of soaring oil prices.

The Commission has already insisted VAT cuts on fuel would not be possible, but the latest package is designed to respond to longer term worries.

EU Fisheries Commissioner Joe Borg said: "For many years, the EU fleet has suffered from a vicious circle of overcapacity, overfishing, and declining profitability.

At the same time, fishermen have been unable to benefit from reduced supply and rising retail prices for fish products.

"As a result, margins in many segments are wafer-thin, making the sector much more vulnerable than others to a drastic rise in costs, such as we have seen with the price of oil."

He said the Commission understood the need for co-ordinated action at EU level "to avert a severe crisis for the industry, and to ensure that the problem is not simply displaced, but really tackled head-on."

That meant not just providing emergency relief, but addressing the continuing underlying
problem of overcapacity which was "undermining all our attempts to get the industry back on a sustainable and profitable footing", he said.

A Commission statement said it was vital to focus aid on the fleets most dependent on fuel, and thus most affected by overcapacity.

Brussels was therefore proposing that EU governments should set up "Fleet Adjustment Schemes (FAS), under which current limits on subsidies for decommissioning vessels would be lifted temporarily.

Under the scheme aid would also be offered to vessel operators replacing larger old vessels with smaller, more energy-efficient ones.

There would also be "temporary cessation aid" available for all vessels for up to three months throughout the remainder of 2008, on condition that the vessels are part of a fisheries restructuring
plan.

The rescue package comes on the eve of a massive truckers' demonstration in Brussels, expected to involve 400 lorries blocking major routes into the city, and about 4,000 demonstrators protesting against high oil prices.

Brussels was hit earlier this month by a one day demonstration by French and Italian fishermen, who fired flares
and clashed with police.