MEPs voted to suspend a debate on the proposed Transatlantic Trade and Investment Partnership (TTIP) in the European Parliament this morning by a margin of just two votes.
The decision to delay the debate, supported by the centre-right and conservative groups, provoked a furious reaction in the chamber.
Euro MPs had been due to vote today on limits for negotiators involved in the controversial trade deal between the EU and the United States.
In Ireland the Government has strongly backed TTIP , arguing that it will lead to the creation of jobs, while Sinn Fein has been a vocal critic of the proposed deal.
Political groups had previously appeared to be close to a compromise on the parliament's "red lines" for negotiators, so that they would not unduly hamper the deal.
But the socialist group in the parliament insisted yesterday on excluding from the trade deal a controversial mechanism for resolving disputes with investors.
The dispute mechanism is the key objection among campaigners and many European lawmakers.
They fear that the arbitration panel foreseen in the deal would effectively allow companies to bypass national courts if they feel their investments are under threat.
Brussels has proposed a separate investment court but Washington insists the current arrangements are adequate.
Hundreds of demonstrations were held across Europe in April against the deal, which US and European leaders have vowed to press through by next year.