In Europe, agriculture on managed peat wetlands is often a balance between maximising farming production, whether hay harvest or cattle production or both, and a desire to maintain a threatened ecological landscape with its flora and fauna. Because of the large amount of carbon stored in peat soils, the management of peat wetlands to minimise the production of atmospheric greenhouse gases is also now a priority. Eddy correlation and allied radiation and soil physics measurements were made continuously over several years at a wetland meadow peat site that is subject to a water level management scheme, at Tadham Moor in the Somerset Levels and Moors, UK. These measurements provided estimates of Net Ecosystem Exchange (NEE) and, through established models, estimates of Gross Photosynthetic Production (GPP), and separate soil and plant respiration. A relationship between depth to the water table and soil respiration was established that showed increasing ecosystem respiration with increasing depth to the water table. Annual results are presented for 2002, which also incorporate harvest and cattle carbon gains and losses. In 2002, the site had a significant loss of soil carbon of 59gCm−2 y−1 compared to the historical long-term carbon uptake of natural peat-lands. However, it is shown that the current implementation of the management scheme is ineffective in maintaining the prescribed water levels in the ditches. A consequence of this is that desired water levels in the field are not achieved. Controlling the management scheme for in-field water levels (rather than channel levels) is shown to decrease markedly the annual soil respiration and hence help to maintain the current soil carbon stocks without affecting the current farming practice.