The European Union has declared the military wing of Hezbollah to be a terrorist organisation.
Britain and Holland overturned the EU's previous opposition to the blacklisting, which follows evidence suggesting that the radical Shia movement based in south Lebanon was behind a suicide bombing in Bulgaria last year that killed five Israeli tourists and their Bulgarian driver.
Britain's foreign secretary William Hague welcomed the decision by EU foreign ministers in Brussels, saying: "In reaching this agreement, the EU has sent a clear message that it stands united against terrorism.
"It shows that no organisation can carry out terrorist acts on European soil, such as the appalling attack in Bulgaria one year ago, without facing the consequences."
This measure will freeze any funds in the EU linked to Hezbollah's military wing, although whether that will be a significant blow is unclear. Mr Hague denied that the blacklisting would destabilise Lebanon, where Hezbollah's allies are part of the government.
"Designation will do nothing to affect the EU's and the UK's strong relationship with, and support for, Lebanon. As we have shown by our recent large increases in security and humanitarian assistance to Lebanon, the UK remains deeply committed to its stability," he said.
But Tanaiste Eamon Gilmore voiced reservations about the blacklisting of Hezbollah's military wing.
The Government was concerned the EU move could destabilise the country, where Irish peacekeeping troops are currently serving.
Mr Gilmore attended the meeting of EU foreign ministers in Brussels, where the decision on adding the organisation to its blacklist of terrorist organisations was taken.
Prior to the meeting, the Tanaiste urged caution because Hezbollah was a key part of the current Lebanese government.
The decision draws a distinction between Hezbollah's military wing and the rest of the organisation. EU countries will still be able to have links with Hezbollah's political leadership and European aid for Lebanon's government will be unaffected.
Benjamin Netanyahu, the Israeli prime minister, welcomed the announcement, saying Hezbollah "has imposed terrorist rule on wide sections of Lebanon, has converted them into an Iranian protectorate and is stockpiling tens of thousands of rockets there". (© Daily Telegraph, London)