New laws could speed up the culling of livestock
The proposed Animal Health Bill - expected to come into force in the New Year - aims to close loopholes that ministers say have made it harder to eradicate foot-and-mouth, and scrapie in sheep.
Scientists believe the fight against foot-and-mouth was weakened by farmers, who used the power of appeal against culls of apparently healthy animals on farms neighbouring confirmed outbreaks.
This caused delays, making it more difficult to keep on top of the spread of the virus - and may in some cases have allowed other farms to become infected.
Another measure involves reducing the compensation to farmers whose animals have been infected with foot-and-mouth due to poor "biosecurity" standards.
They would receive only 75% of the value of their animals - before they became infected - if it could be proved they might be partly responsible for the virus spreading.
Agriculture minister Elliot Morley said: "We want to send a clear message that we will no longer tolerate poor biosecurity."
He added: "This disease has involved huge expense, disruption and distress.
Government inconsistencies
"We must not be prevented from taking effective action to stamp out the disease because we lack a key power.
"The foot-and-mouth provisions of this Bill ensure that we will not be left in this position.
The National Farmers' Union (NFU) stresses there should be no question of penalising farmers unless Defra has given them clear and practical advice on biosecurity.
It believes there have been inconsistencies in the communication process during the foot-and-mouth crisis, which must be addressed.
NFU president Ben Gill said: "Farmers were understandably shell-shocked and distraught at the threat to their animals and the way government action was both communicated and applied often did not help.
"It is essential, therefore, that all farmers are in a position to understand how the legislation will impact on them.
"Government contingency planning - including these changes - must be discussed fully and communicated properly to them."
Scrapie fears
The Bill will also step up attempts to rid the British sheep population of the brain disease scrapie.
Although it has been around for hundreds of years and is not harmful to people, it has similar symptoms to BSE, linked to the fatal brain disease variant CJD in humans.
The fear is that scrapie could be masking BSE in sheep - a possibility which scientists were investigating when it was found that they had been testing cattle brains instead of sheep tissue.
A voluntary scheme to breed scrapie out of sheep has had a low take-up by farmers, so the bill is expected to introduce powers for the compulsory testing programme for rams.
Huge slaughter
Those with a genetic make-up likely to produce lambs at risk from the disease would have to be slaughtered or castrated.
The final element of the proposed law is to prepare for an event everyone hopes will never happen.
If it is found that BSE has in fact crossed from cattle to sheep, plans have been drawn up which could involve the slaughter of all of the 40 million sheep in Britain.
This would involve a huge operation phased over several years, and powers are now being put into place to allow this to happen - hopefully they will never have to be used.