The European Union's 27 members failed to reach agreement about the release of the new genetically-modified Amflora potato.
The potato is engineered to produce more starch, which has industrial uses including making paper, glue or textiles. The residue and skin would be used in animal feed.
German chemicals giant BASF AG wants approval for the GM potato in a proposal that would allow for a 0.9 percent tolerance for accidental introduction into the human food chain.
The EU's Standing Committee on the Food Chain and Animal Health returned "no definitive opinion" on the proposal. This means the proposal goes to EU ministerial level and if there is still no agreement there within three months, it goes on to the European Commission, the EU's executive arm.
A dozen EU countries voted against the GM potato: Austria, Cyprus, Denmark, Greece, Hungary, Italy, Lithuania, Luxembourg, Malta, Poland, Romania and Slovenia.
Those in favor were Britain, Bulgaria, the Czech Republic, Estonia, Finland, Latvia, the Netherlands, Slovakia, Spain and Sweden.
Belgium, France, Germany, Ireland and Portugal abstained.
The Commission is likely to act on the basis of a report from the European Food Safety Authority, which said it was improbable the potato would harm human or animal health or the environment.
European Trade Commissioner Peter Mandelson had earlier warned that any EU delay over the approval of bioengineered crops declared safe by scientists risked legal challenges from farm exporters such as the United States, Canada and Argentina.