The French government is expected to present its formal response later today to the European Commission's instruction that it must lift the unilateral embargo on British beef imports.
However, France warned yesterday that it was not ready to lift the ban. Unless there is a dramatic shift in its policy, the response is likely to be a rebuff to Britain and the EU.
Britain has looked to the European Commission to enforce the lifting of the ban, which was endorsed in a Commission report last month backing the safety of British beef.
The likely French response will almost certainly prompt Britain to initiate legal action against France next week.
Contrary to the wish of the British Prime Minister, Mr Blair, to find a diplomatic solution, legal action stretching into many months could begin on Tuesday, which is the deadline for a voluntary lifting of the ban set by the European Food Safety Commissioner, Mr David Byrne, last month.
The French position hardened earlier yesterday when France's parliamentary relations minister, Mr Daniel Vaillant, told a meeting of the French Cabinet that Britain had failed to meet its requirements to ensure that British beef was free of BSE.
Seemingly unconcerned by threats of legal action, the French government indicated that it needed further commitments from Britain on labelling and tracing cattle herds.
"The conditions imposed by France are not yet in place," Mr Vaillant said. "For now, there can be no unilateral lifting of the embargo. We prefer a solution that allows us to guarantee health and at the same time leads to a way out of the crisis."
In the Commons, French resistance to lifting the ban sparked a furious exchange between the Prime Minister and the Conservative leader, Mr William Hague, who demanded the head of the Agriculture Minister, Mr Nick Brown.
The French "Non" appeared all the more surprising following Mr Blair's prediction on Monday that a deal with the French could be reached "within days" and his insistence that the beef ban could be swiftly resolved through quiet persuasion.
Insisting Britain could take legal action against France if further ministerial and diplomatic talks failed, Mr Blair told MPs: "We can, of course, take the French to court, and will take the French to court, if they are unreasonable or do not accept what we have put before them. But it is obviously preferable that we persuade them to do that."
But Mr Blair's tough words on beef failed to reverse the fact that France's position was nothing short of a dramatic setback for the government.
The Conservative leader taunted him by describing the French response as a "total humiliation" for the government, adding: "On Monday, you gave the French the Third Way and on Wednesday they gave you the two fingers."
Predicting a lengthy legal battle with the French if Britain was forced to take legal action, Mr Brown told Channel 4 last night that if the government could not reach agreement with the French then legal action that "will take time" would follow.
"We are right to continue our discussions with the French," he said, but the government had "not put its legal options to one side."