"In the debate, broad agreement prevailed over the fact that the current proposal on the Council's table was counter-productive and far from a good basis for a decision. It became clear to everybody that a way out was needed", said Italian MEP Monica Frassoni.

Ms Frassoni also criticised Mr McCreevy for being "incredibly vague" about what the Commission's intentions were concerning the legislation.

"We are in danger of reaching a stage that would radically limit the patentability of inventions", said German centre-right MEP Klaus-Heiner Lehne.

"A restrictive patentability would harm innovative industries especially in the areas of medicine, automotive production, technical components and household goods", added the MEP.

Latest twist

This is just the latest twist in a bumpy ride for the software patent - which is intended to offer patent protection to inventions that use software to achieve their effect.

The legislation has been blocked in council twice by Poland, meaning the qualified majority needed was lacking - resulting in a deadlock.

This meant that MEPs were entitled to call for a re-start of negotiations.

Florian Müller from nosoftwarepatents.com described the decision as a "spectacular victory for democracy".

Whereas small and medium-sized companies fear they will be put out of business by the legislation, big companies have warned that billions in research and development spending would be wasted if they were denied access to patent protection.

Both sides have been involved in intense lobbying of MEPs.

It is up to the European Commission to decide whether to withdraw the legislation.