Lamb and mutton is to go on sale under the Exmoor brand in a scheme which offers a lifeline into some of the South West's most threatened farms.

Breeders of indigenous Exmoor Horn sheep have launched their own label, hoping to tap into the still-growing market for local foods.

The initiative means meat which has superb eating quality but has been one of the region's best-kept secrets will now be available by next-day delivery anywhere in the country.

But a lot of hopes are riding on the promotion: livestock farming on the moor is in steep decline with dozens of farmers signalling their intention to scale down or quit under the twin pressures of increasing regulation and falling incomes.

There are already warnings that EU plans for the electronic ear-tagging of all sheep, and changes to hill-farming support payments, will all but wipe out any meagre profits producers can currently scrape together.

The situation on Exmoor and other upland areas has become so serious that Dr Stuart Burgess, the Government's "rural advocate", has announced a full-scale inquiry into their future.

But the Exmoor Horn Sheep Breeders Society says its branding scheme may be the first step towards securing more profitable times for a part of the West Country where farmers have traditionally been able to remain in business only through heavy subsidies.

Society chairman Edward Harding said no one should underestimate the significance of the scheme, which has been three years in the planning.

"It marks a defining moment in the long history of our society," he said.

Exmoor Horn sheep, thought to be descended from Welsh mountain sheep imported into the region 300 years ago, have remained a pure breed with a distinctive flavour and exceptional eating quality.

A hundred years ago, Edwardian diners were well aware of it: Exmoor Horn mutton was a delicacy that was served in some of the most prestigious London restaurants. But the scheme's marketing consultant, Ian Rigby, said Exmoor Horn lamb had been sold mainly through local outlets and markets as an unbranded commodity.

"Traditional Exmoor producers were not geared up to sell directly to consumers or the meat trade but, from the market research I carried out, it became clear that there was significant demand both locally and further afield for this unique product," he said.

Four leading Exmoor restaurants served have already put Exmoor Horn lamb on their menus.

Meanwhile, Exmoor is poised to get a brand new auction centre – seen as essential to the survival of livestock farming on the moor.

But the plan, backed by local farmers and residents, has left the national park committee facing a dilemma.

For Exmoor Livestock Auctions, operator of the existing Cutcombe market in Wheddon Cross, near Minehead, says the £1.2 million scheme can go ahead only if it is allowed to build and sell 13 open market homes on the site to raise finance. Another 12 affordable homes and some business units would also be included in the scheme to redevelop the market site.

But, since 2005, the national park authority has had a strict policy stipulating all new homes built within its boundaries must be affordable – to provide accommodation for local families – and has set a maximum of 20 builds in any one year.

A decision on the scheme has been deferred until after a site visit this Friday.

Auctioneer and manager Peter Huntley says the existing market site is showing its age after a century of operation, while the new development would create jobs and homes as well as ensuring the continuation of livestock grazing on the moor.

"Cutcombe needs a new, modern facility to be able to continue supporting the Exmoor farming community in the future," he said.