Brussels - EU member states and the European Parliament have agreed on a major reform of the bloc's vast farming subsidies, drawing concerns from NGOs that said it was not "green" enough.

"Today's agreement starts a real shift towards a greener and fairer Common Agriculture Policy (CAP)," the European Commission's vice president Frans Timmermans tweeted on Friday.

"It's not perfect, but still a big step in the right direction," he said.

The deal came after several rounds of the crunch negotiations failed largely on environmental concerns. It should be signed off by EU farming ministers on June 28.

The sums involved are huge. The CAP runs to 387 billion euros ($472 billion) over seven years -- a third of the EU's total multi-year budget -- with 270 billion euros going in direct aid to Europe's farmers.

The EU's 27 member states approved the reform of CAP in October, but they had to agree with MEPs on the details.

"We were keen to strike a balance between the economic development of farms and the necessary protection of the environment and climate," said centre-right French MEP Anne Sander, who was a key player in the deal.

"Some people sometimes lose sight of the fact that without farm income, there will be no environmental and climate sustainability," she added.

The agreement was reached after long delays over concerns in particular on special premiums granted to farmers who adopt practices deemed more beneficial for the environment.

MEPs initially called for them to represent at least 30 percent of direct payments to farmers, while the member states argued for a threshold of 20 percent.

In the end, the agreement provides for an average of 25 percent per year over the seven-year CAP period, with the ability to gradually phase-in the new system.

MEPs and member state negotiators also agreed to penalise farmers who do not respect workers' rights, with the risk of payment cuts in the event of infringement.

One of the most contentious discussions was over biodiversity requirements with environmentalists furious that obligations on farmers didn't go further.

The World Wildlife Fund complained that the resolve originally demonstrated by MEPs ended up being "just a mirage".

The deal handed the bloc's farming-intensive member states "full satisfaction", it said.

Climate change scenarios