A year-long European Parliament inquiry accused the Government of traumatising farmers and breaking animal welfare laws during the 2001 outbreak.
Bureaucratic delays and red tape may have actually doubled the number of cases, it said, and a ban on the movement of all susceptible animals should have been introduced immediately.
But, as the report was overwhelmingly endorsed by MEPs in Strasbourg, the Government insisted all its action were in line with EU rules including the mass slaughter and burning of animals.
"Every action was subject to an impact assessment, everything complied with EU requirements and this report contains exaggerated claims," said a Government spokesman.
"While there are some helpful clarifications and a recognition that the Government responded well in the face of such an outbreak, there are serious errors of fact".
The report, which has no legal force, said that in any future crisis, emergency vaccination must be a first choice option and not a last resort - something the Government has already conceded, in the wake of two inquiries in Britain.
Tomorrow the European Commission, which supported the mass cull at the time, is expected to unveil new guidelines which will also acknowledge that vaccination must move up the list of priorities.
In the 2001 outbreak, vaccination was resisted because, paradoxically, such a method of halting the spread of disease automatically costs farmers their "disease-free" status on world markets and halts trade.
The European Parliament report said a mass cull on the scale conducted by the Government "will not be publicly acceptable again".
Liberal Democrat MEP Nick Clegg said the report highlighted the need for a common European strategy for tackling such outbreaks: "It shows how Europe can play an essential role when politics and pride prevent a national government from taking full responsibility."
On compensation, the report said the Government's scheme was ill-thought out, over-compensating some while leaving others with nothing.
But the report's recommendation that future compensation schemes should be conditional on contributory insurance schemes was rejected by Mr Clegg as unworkable in the UK: "Studies on insurance schemes are very welcome but whilst this system may be appropriate in countries such as Germany, the Netherlands and Belgium, it would only discriminate against British farmers and heap yet more misery on a devastated agricultural community."