EU leaders meeting at a summit in Brussels yesterday welcomed plans by the European Commission, the EU's executive arm, to include proposals for increased member state flexibility to reduce value added tax.
The proposals "would provide the option to member states of VAT zero rating for sanitary products," the leaders said in early conclusions of the summit.
It was not immediately clear how long it would take for the proposed change to come into force.
Eurosceptic and feminist MPs had teamed up to threaten to back a rebel amendment on the issue to the government's Finance Bill next week.
Feminists have long argued that the five percent tax on tampons in Britain -- the lowest allowed by the EU -- is unfair, while eurosceptics resented the bloc's role in setting the rate.
Cameron's government has faced pressure over the issue for months.
This came after over 300,000 people signed a petition saying that no tax should be charged on tampons and sanitary towels.
The issue has also caused anger in other countries. In France, lawmakers voted in December to reduce the tax rate on sanitary products from 20 percent to 5.5 percent.
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