Brussels - The European Union said Thursday it will give its 28 member states the option of completely removing a tax on tampons which feminists had denounced as unfair.
EU leaders welcomed plans by the European Commission, the EU's executive arm, to "provide the option to member states of VAT zero rating for sanitary products," according to early conclusions of a Brussels summit.
It was not immediately clear how long it would take for the proposed change to come into force.
The move comes following pressure from British Prime Minister David Cameron, who is seeking to ward off a damaging parliamentary rebellion on the issue ahead of a closely-fought referendum on British membership of the EU on June 23.
Eurosceptic and feminist MPs had teamed up to threaten to back a rebel amendment on the issue to the government's Finance Bill next week.
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Feminists have long argued that the five percent tax on tampons in Britain - the lowest allowed by the EU - is unfair, while eurosceptics resented the bloc's role in setting the rate.
Cameron's government has faced pressure over the issue for months.
In November last year, finance minister George Osborne announced ministers would give millions of pounds raised from the tampon tax to women's charities, including those tackling domestic violence.
This came after over 300,000 people signed a petition saying that no tax should be charged on tampons and sanitary towels.
The issue has also caused anger in other countries. In France, lawmakers voted in December to reduce the tax rate on sanitary products from 20 percent to 5.5 percent.
EU rules on VAT are agreed unanimously among member states. Tampons already benefit from a special rate of reduced taxation in Britain under EU rules.