By Richard Black
Environment correspondent, BBC News, Madeira
The first catch of Japan's new whaling season came in just before the meeting
Peace talks on whales and whaling are to continue for a further year.
Delegates to the International Whaling Commission (IWC) annual meeting here agreed it was worth extending reform talks that began a year ago.
Pro- and anti-whaling countries emphasised that fundamental differences remain between the two blocs.
Earlier, animal welfare groups released a new report arguing that whaling countries would gain economically by switching to whale-watching.
They calculate that whale-watching
generates tourism revenue of about $2.1bn (£1.3bn) per year
around the world, dwarfing income from whaling, which is measured in tens of millions of dollars.
In recent years this has become one of a battery of arguments the anti-whaling camp has assembled against the industry.
But with attempts to end hunting in Iceland, Japan and Norway showing little sign of success, anti-whaling countries led by the US embarked last year on talks with Japan and its pro-hunting allies aimed at finding a compromise that everyone could live with.
THE LEGALITIES OF WHALING
Objection - A country formally objects to the IWC moratorium, declaring itself exempt. Example: Norway
Scientific - A nation issues unilateral 'scientific permits'; any IWC member can do this. Example: Japan
Aboriginal - IWC grants permits to indigenous groups for subsistence food. Example: Alaskan Inupiat
For the anti-whaling side, potential gains include a possible reduction in the total number of whales being killed each year, greater oversight of hunting, and reform of the IWC's scientific whaling clause under which any country can set its own catch quotas irrespective of the 1982 global moratorium on commercial hunting.
Whaling nations, particularly Japan, see political benefits in making a deal that would reduce the barrage of criticism they receive from whaling's opponents.
Japan also wants to secure quasi-commercial quotas for four coastal communities with a history of whaling.
The talks were supposed to conclude a package deal at this week's meeting, but it became clear last month that this was not going to happen.
Most member nations wanted to continue for another year, but some delegates said before this meeting began that the process could collapse - which, in some people's eyes, would have meant the end of the IWC.
Of the six countries involved in small group talks aimed at developing the compromise "package", Australia has been the most hawkish.
Environment minister Peter Garrett laid out his government's condition for the talks - that they must bring an end to scientific "special permit" whaling as it is currently practiced.
"I do not believe it will be possible to reach any package predicated solely on reductions in the size of certain special permit programmes," he said.
"While Australia certainly wishes to see fewer whales killed under special permit programmes, reductions in catch cannot solve the fundamental problem."
Japan has agreed to refrain from including humpback and fin whales in its annual Antarctic hunt and reduce the number of minke whales targeted from 935 to 600.
However, it is adamant that at this stage it will not concede on the principle, enshrined in the 1946 whaling convention, that each country can set its own quotas for special permit catches.
Japan's whaling commissioner Akira Nakamae responded that his country had made the running so far.
"In the last year during the small working group meetings, Japan declared to make the major concessions including a reduction in the sample size of scientific whaling," he said.
"Even though we disagree with the principle, we could also agree to including a South Atlantic whale sanctuary (a key demand of Latin American countries) as part of the package.
"But we cannot accept that some contracting parties... continue to demand the phase-out of scientific whaling."
The gulf between Australia and Japan may prove hard to bridge over the coming year.
Although on the surface Australia has the backing of its traditional allies - New Zealand, the EU and the US - in private, some members of this bloc are concerned that successive Canberra governments have made whaling into such an emotive public issue that Australia now has no room for diplomatic manoeuvre.