The local government of New South Wales in Australia has said it will not allow trials of genetically modified crops to go ahead in the state until farmers have protection from legal liability.

Biotechnology firms Bayer and Monsanto have applied to plant 3,500 hectares of GM canola in a crop trial in New South Wales, and the state's advisory council is due to make its recommendation to the government next week, reported ABC News.

At the moment, farmers could face court action if GM seeds from their farms contaminate neighbouring farms. Now however, farmers have been assured that the trials will not be permitted until the issue of legal liability is resolved.

Elsewhere in Australia, the government of Victoria has been accused of sitting on a report it commissioned into the economic impact of GM crops.

The opposition claims agriculture minister Bob Cameron has had the report from Melbourne University economics professor Peter Lloyd since December, ABC News reported.

The state currently has a moratorium on GM crops, which ends in May.