Talks aimed at resolving the row over mackerel quotas which has angered Scottish fishermen have broken down.
The meeting, with the EU and Norway in Copenhagen, ended with the Faroese refusing to sign a deal that would set mackerel catch levels for 2011.
Iceland and the Faroes sparked outrage earlier this year by unilaterally setting quotas in their own waters.
The Scottish government said the lack of a deal could be disastrous for stocks.
Iceland last week announced that its mackerel quota for next year would be the same as this year.
Scottish Fisheries Secretary Richard Lochhead said: "I am angry and extremely disappointed that these vital three-way talks in Copenhagen have broken down.
"Given this year's situation where the Faroese and Iceland had set their own massive unilateral catch quotas out with international agreements, we were all determined to find a way of resolving this intolerable situation for 2011."
He said the Faroese were not even taking the extra mackerel for the benefit of their own fleet, but to use as currency with Russia.
Ian Gatt, chief executive of the Scottish Pelagic Fishermen's Association, said: "It is unbelievable that after four rounds of negotiations it was not possible to reach an agreement due to the unrealistic demands of the Faroese, and before then, Iceland.
"We would all like more fish but we need to abide by international agreements to ensure that the mackerel stock is harvested responsibly.
"We utterly condemn the unsustainable fishing practices that the Faroese and Icelanders are now about to embark upon."
Scottish Conservative MEP Struan Stevenson said: "They have trampled over the good fisheries management of Scottish fishermen with their recklessly enormous quotas.
"The European Commission and EU member states must now get tough."
Mackerel is the Scottish fleet's most valuable stock.