Buried in a prospectus inviting investors to buy shares in a fledgling biotech company is an arresting claim attributed to the UN's Food and Agriculture Organisation.

"Commercial aquaculture is the most rapidly growing segment of the agricultural industry, accounting for more than $60bn sales in 2003. While land-based agriculture is increasing between 2% to 3% per year, aquaculture has been growing at an average rate of approximately 9% per year since 1970."

And then the prospectus for the US company AquaBounty offers this observation to tantalise prospective investors: "The traditional fishery harvest from the ocean has stagnated since 1990."

So what is to be done to satisfy the world's seemingly insatiable appetite for fish? An appetite that will see the consumption of farmed fish outpace global beef consumption by nearly 10% within five years, according to the UN?

AquaBounty, whose shares are sold on London's Alternative Investment Market, thinks it has the answer. And if, as looks increasingly likely, the US government agrees, the implications for global food production will be enormous. Welcome to the new world heralded by the "GM salmon".

The company's dream of selling genetically modified salmon eggs that allow the fish to grow to maturity in half the normal time received a giant fillip last week when it announced that the US Food and Drug Administration (FDA) was close to granting approval.

A positive FDA response would see salmon become the first GM-engineered animal marketed for human consumption. Dramatically speeding up the time it takes to harvest a mature salmon could stimulate a huge rise in production, making salmon plentiful and cheaper, GM enthusiasts say.

AquaBounty expects to receive the nod by the end of this year, meaning GM salmon could be on supermarket shelves within three years. The company's share price doubled on the strength of the announcement.

But the euphoria the company and its investors experienced following last week's announcement quickly evaporated amid a furious backlash from consumer groups.

"The furore over this fish puts paid once and for all to the myth that US consumers are content eating GM food," said Eve Mitchell, European food policy adviser at Food and Water Watch Europe, which opposes GM food. "Consumers are not, and in fact jammed up the White House telephone lines last week protesting any approval. Quite understandably the salmon industry is not happy either, as people will simply avoid all salmon rather than risk getting this stuff. Only those who stand to gain financially think this is a good idea."

Predictably, vested fishing interests have waded into the row. Local radio stations from Ireland to Canada carried interviews with angry fishermen who fear that initial reluctance to consume GM salmon will be overcome by simple economics. "Genetically modified food is just a bad deal," a commercial fisherman in Charleston, South Carolina, told his local station. "This will attack our marketplace. It'll come on the market so cheap that people will buy it, because we're all on a budget."

Ronald Stotish, AquaBounty's chief executive officer, is keen to play down these particular fears. His company is more interested in selling its technology to the burgeoning markets of Chile, China and Asia rather than competing with Atlantic fishermen. "The global salmon market is very, very large and the opportunity is in areas that cannot raise salmon," Stotish told the Observer. "We don't believe it need threaten any national markets, particularly for the high-value premium markets. We are hopeful that people don't regard us as an economic threat, but simply look to us as a technology that maybe can become part of the future."

If Stotish, a biochemist by training and an urbane advocate for his cause, succeeds, other companies are waiting in the wings to exploit similar GM technologies. AquaBounty itself is looking at GM trout, according to its prospectus, and has conducted trials on catfish. Up to six other species of fish – including tilapia and cod – are viewed by biotech companies as ripe for genetic modification, according to experts.

Not that Stotish enjoys being the vanguard of a GM food revolution. "It would be far easier to be the third or fourth or fifth [company to bring a GM animal to market]. If you are the first, you attract all of the attention and the burden of attention falls to you. It's a difficult position for a small firm like us."

AquaBounty is also battling dire warnings that its chief product threatens the natural food chain. The company's genetic technology ensures that more than 98% of its salmon cannot reproduce, Stotish says. In addition, the eggs it produces (which are all female thus ensuring the GM fish cannot reproduce among themselves) will be sold only to strictly monitored growers operating fish farms under licence from the FDA.

"This biological and physical containment almost certainly guarantees no interaction with wild salmon," Stotish pledged, pointing out that about 95% of the world's salmon is already produced in farms.

But Helen Wallace, of the anti-GM group GeneWatch, said she had serious concerns. "AquaBounty admit that they expect more than 1% of their fish to be able to reproduce," Wallace said. "If, as they intend, they end up producing large numbers of eggs, that's a large risk." Escaped GM salmon could "outcompete" its wild counterpart by reproducing earlier and threatening its food supply. Some researchers have suggested that even a small number of escaped GM salmon could cause extinction of wild populations in as little as 40 generations.

With potentially weak constitutions, the new salmon might then struggle to adapt to life outside captivity. Food and Water Watch goes as far as to suggest the GM salmon "may only last long enough in the wild to prevent natural populations from reproducing, leading to a total extinction of salmon in open waters".

Escapes are not uncommon. In March, nearly 100,000 farmed Atlantic salmon escaped into the wild from just one hole in a net at a UK fish farm.

Such concerns take place against the backdrop of a much wider battle between pro-GM groups and an increasingly vocal organic movement. GM crop production is promoted aggressively on the grounds that it can help eliminate global hunger and bring down food prices. Opponents claim the promised GM revolution that saw crops made resistant to potent herbicides – something that could dramatically reduce farmers' spraying time – has resulted in the rise of superweeds across vast tracts of US farmland.

Experts said they had been expecting the battle over GM food to move to fish for some time because they are easier to modify. Stotish said his company was focused purely on aquaculture. But GM pork already looks a real possibility. The Enviropig, a trademarked pig that has been genetically modified to excrete less polluting phosphorous in its faeces, has been developed by researchers in Canada. Genetically modified chickens capable of laying eggs containing proteins needed to make cancer-fighting drugs have been created by Scottish scientists.

A goat that produces a spider's web protein – paving the way for silk to be farmed – is under development. GM goats have also been raised to produce human breast milk and to deliver a special protein for people whose blood cannot flow smoothly. And then there is the GloFish, a genetically modified fluorescent zebrafish that, according to its sales blurb, would grace any aquarium and comes in three "striking colours" – starfire red, electric green and sunburst orange.

But amid the rush to spread GM's reach and scope, at least one government has recently had second thoughts. Muhyiddin Yassin, Malaysia's deputy prime minister, last week announced his government would not be releasing genetically modified male Aedes mosquitoes capable of sterilising female mosquitoes. "We must consider several aspects of the proposed release, including its impact on the environment," Yassin said. "In addition, the release of the mosquitoes must be endorsed by several international organisations."

For GM opponents, the U-turn was a cause for celebration, a sign that politicians still accept that the technology carries massive risks. But the ultimate victory in the argument about genetically modified food comes down to the invisible hand of the market. Both sides agree it is significant that none of the big GM technology companies such as Monsanto is attempting to create GM meat or fish, preferring to focus on more lucrative GM crop production.

"The process of genetically modifying animals has been a commercial failure," Wallace said. "Too many scientists and small biotech companies have engineered animals just because they can, without thinking through the technical, economic, marketing, animal welfare, environmental or social issues."

Yet Stotish senses opportunity for his fledgling industry. "Once the [GM] technology was adapted for plant systems, the size of that opportunity dwarfed the efforts on the animal side. We've lagged behind." If the FDA gives the green light to GM salmon, expect a frantic game of catch-up.