A fishermen's group in Essex is taking legal action against the government, accusing it of failing to secure a fairer deal for smaller operators.
The Under Ten Fishermen's Association (Nutfa), gave Defra until 23 May to come up with a revised quota system.
Now the deadline has passed the Colchester-based group has instructed lawyers to bring legal action.
Members say owners of boats which are under 10m long are being forced to throw away most of their catch.
Nutfa claims this amounts to discrimination in the way quotas are allocated.
Company secretary and treasurer Andrew Craig said: "We're not fighting the quota given to the UK, we're fighting the way in which it's being distributed among the UK fleet.
"Some sectors of the industry are being given far more quota than they need, while others are deprived of quota all year and have to dump enormous quantities of fish."
"Decisions on quota shares were based on the best information available at the time"
If successful, boats under 10m may be able to claim compensation for financial loss.
"These claims would go back many years and are expected to be substantial," Mr Craig added.
In a statement, a Defra spokesman said: "Decisions on quota shares were based on the best information available at the time.
"We understand the difficulties that inshore fishermen are facing, and fisheries minister Jonathan Shaw is working closely with the industry to come up with solutions."
Earlier this month Mr Shaw told a meeting with Nutfa representatives that he wanted to see a new joint decision-making process between government and the fishing industry.
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