The BBC's Claire Doole in Berne: 'Scientists were worried about their life's work'

In the first national referendum anywhere on the issue, around two-thirds of voters threw out the proposal.

Not one of Switzerland's 26 cantons voted in favor of the tough restrictions which it would have imposed. Turnout was low, at just over 40%.

The BBC correspondent in Switzerland said that although the Swiss are environmentally-conscious, the issues of jobs and investment proved to be a bigger vote-winner.

Research to continue into genetically modified food

Many leading scientific research companies are based in Switzerland and the referendum caused widespread debate.

Left-wing parties joined environmentalists and animal rights activists in pressing for a ban, accusing genetic researchers of tampering with nature without clear medical benefits.

In the run-up to the vote, the Swiss Government and leading drugs companies said the plan would force a draconian shutdown on research in Switzerland, sending highly paid jobs to other countries.

The issue of jobs is also highly sensitive in Switzerland. Despite its small size, it is a leading force in biotechnology.

Monsanto spokeswoman Ann Foster: 'No great risk'

Basel-based pharmaceutical giants Novartis and Roche rank with competitors such as the American firm Monsanto among world leaders in the field.

The Swiss pharmaceutical industry greeted the vote with relief. "The way is now open for Switzerland's industry and universities to carry on into the future with their biomedical and pharmaceutical research," said a Roche statement.

A professor from the Geneva Medical School said the result signalled the decline of what he called fundamentalist environmental ideology.

Switzerland is the first nation in the world to put the issue of genetic research to a ballot.

Voters were asked to decide whether more stringent restrictions should be placed on scientists.

If it had been approved, the new law would have banned all research with genetically modified animals and crops.