Britain's food giants have privately warned that they are struggling to maintain their decade-long ban on genetic modification and called for the public to be educated about the increasing cost of avoiding GM, The Independent reveals today.

As major producers such as the US and Brazil switch to GM, supermarkets are now paying 10 to 20 per cent more for the dwindling supplies of conventional soya and maize, according to a report by the Food Standards Agency (FSA) and the Department for Environment, Food and Rural Affairs (Defra).

Tesco, Sainsbury's, Morrisons, Marks & Spencer, Somerfield, Aldi and Co-op met civil servants to explain their problems in finding non-GM supplies.

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Warning of the price hikes, the report – quietly published online last month – said: "Retailers were concerned that they may not be able to maintain their current non-GM sources of supply as producers increasingly adopt GM technology around the world."

Despite legislation requiring GM food to be labelled in the UK's cafes, restaurants and takeaways, customers were already eating food saturated with GM fat without knowing, added the report.

Although fierce public opposition to so-called "Frankenstein foods" has fallen from its peak at the end of the 1990s and early 2000s, when retailers vowed not to stock anything with GM ingredients, changing genes in human food remains highly controversial.

Campaigners such as Friends of the Earth fear GM crops could damage human health and the environment and place control of the food supply in the hands of a few multinational chemical companies, warning of a "corporate takeover of agriculture".

Despite the potential public backlash, ministers believe it may now be the right time to consider its introduction as a way of meeting a UN target to raise global food production by 2050. Asked whether GM was the answer to his call last month for a new green revolution, Hilary Benn, the Environment Secretary, whose new food security strategy this autumn is expected to move closer to backing GM, praised "science".

Supermarkets and manufacturers can sell food made from GM ingredients grown elsewhere, but must state that products contain GM ingredients.

After meeting industry stakeholders, the joint FSA and Defra document – GM Crops and Foods: Follow-up to the Food Matters Report – reported that there "is some use of GM food ingredients in the UK, particularly in the catering sector where oil from GM crops is often supplied to customers who are working to lower prices, and bulk packs are suitably labelled. It was considered unlikely that relevant information regarding food produced using such oils is provided to the final consumer, as required in EC legislation."

The FSA noted that spontaneous concern about GM voiced by consumers had fallen steadily from a peak in December 2003, when 20 per cent of shoppers were worried, to 6 per cent last September.

Supermarket bosses are rethinking their approach. After delivering the City Food Lecture in February, Sir Terry Leahy, chief executive of Tesco, said that giving in to concern about GM could have been a mistake: "It may have been a failure of us all to stand by the science.

"Maybe there is an opportunity to discuss again these issues and a growing appreciation by people that GM could play a vital role in feeding the world's growing population."

At the time, International Supermarket News quoted an industry source as saying: "I am pretty certain that several parties involved are actively looking for the way out of their Canute-like positions. Maybe the reality of the costs of GM-avoidance is finally striking home."

The FSA/Defra document reported that many stakeholders noted "it may be timely to inform consumers of the issues surrounding GM and non-GM supply chains so that they have a clear understanding of current science, the status of non-GM market being reliant on only a few exporting countries, and the steady increase in GM production".

Tesco was unavailable for comment yesterday, but the British Retail Consortium, which speaks for the major grocery retailers, denied British shops would change their approach. "Retailers are not stocking GM products and there are no plans to change that – it's a response to customers' views," said spokesman Richard Dodd.

Pete Riley, director of GM Freeze, the anti-GM campaign, accused the Government of being "desperate" to back GM, adding that it had pressurised Defra and the FSA into producing a "scaremongering" report. Supermarkets could work with growers to produce a long-term, non-GM supply, he said, adding any store that broke ranks by introducing GM would be "brave".