The government has said there is no conclusive proof that the long-term use of organophosphate (OP) based sheep dips pose a direct threat to health. A report from London School of Hygiene and Tropical Medicine said the health of sheep farmers in south-west England has been worsened by exposure to OPs.
The study looked at a group of more than 300 farmers with chronic illness.
But the Department for Environment, Food and Rural Affairs (Defra) said sheep dips would remain in use.
Defra said: "The report does not provide information that would change the government's policy to allow OP sheep dips to remain on the market.
"These are authorised veterinary medicinal products that have been assessed for their quality, safety and efficacy before being granted marketing authorisations."
It said, however, the government was investigating alternatives to organophosphates for controlling sheep scab, in three projects costing �1.7m.
But Defra said: "Dipping remains a vital treatment to ensure the health and welfare of sheep."
The former north Cornwall MP Paul Tyler, now Lord Tyler, has led a long-running campaign about the issue.