MPs have rejected European Commission proposals aimed at setting a quota for the number of women on corporate boards.
The draft directive sets a minimum objective of women making up 40% of non-executive board members of listed firms by 2020.
European Union states would be required to have sanctions in place for companies which fall short. But Business Minister Matthew Hancock said the Government backed a voluntary approach and dismissed the need for the EU to set a target.
Mr Hancock said the proportion of women on the boards of FTSE 100 companies had risen from 6.2% in 1999 to 17.3% now. The proportion is forecast to hit 37% in 2020, just short of the objective proposed by the Commission.
The Conservative minister said: "We think this business-led, voluntary approach is the right one for the UK and we think that it's making progress. Central to it is a change of culture at the heart of business and that is the only way that progress is going to be sustainable and long-term."
Mr Hancock said the commission's own impact assessment of its proposals weakened the case for Brussels to take action.
Shadow business secretary Chuka Umunna said Labour would not force a vote on the proposals.
But he feared the stance by ministers made it appear the Government was "dragging its feet" when it came to equality issues.
Mr Umunna said: "Given that other European countries are keen to see more women on boards, and given the extent to which so many of our major companies operate across Europe, why has the Government not put forward proposals on what constructive moves European countries could be making positively together to promote more women on boards, something that is good for tackling discrimination, promoting equality, and is good for business too.
"This is most unsatisfactory because here the Government has had a golden opportunity to make clear that the UK wants to be forefront of the debate to achieve greater equality in society, both here and in the EU."