EU fury over Brown plan for competition taskforce

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The Treasury was on a collision course with Brussels last night as the European Commission reacted angrily to British calls for a new committee to probe a lack of competition in key markets.

The Chancellor, Gordon Brown, will today call for an independent committee of experts to investigate several sensitive sectors where the market may not be functioning properly.

His intervention, which will be made at an informal meeting of EU finance ministers in Vienna, comes against the background of growing fears of a tide of economic nationalism in Europe.

However, the plan has been greeted as a declaration of war by Neelie Kroes, the European competition commissioner, who was not pre-warned of Mr Brown's initiative. Officials said that the Chancellor was due to brief Ms Kroes on what he intended to say on Thursday, but failed to make contact by phone despite keeping the commissioner waiting for an hour.

Ms Kroes has already conducted a review of the energy market, identifying problems and threatened to take action against some of the continent's big utilities if sufficient evidence can be assembled.

A spokesman for Ms Kroes said last night: "The European Commission is already undertaking sectoral inquiries in the financial services and energy sectors ...The Commission has to power, not only to ask questions but also to require answers, and very considerable powers to take actions if anti-competitive practices are found.

"The British Government was full of praise for the results of the sectoral inquiry into energy. It is a little strange to suggest someone else would be doing what we are already doing in an effective manner."

Ms Kroes had not planned to go to today's meeting in Vienna, and her allies believe that the Chancellor failed to warn her of his intervention so that she did not change her plans.

EU officials fear that Mr Brown, who has struck a consistently Eurosceptic stance during his spell in the Treasury, would ultimately like to take key competition powers out of the hands of the Commission, giving them to an independent regulator.

Mr Brown has had a series of rifts with the European Commission and had a particularly poor relationship with the previous internal market commissioner, Frits Bolkestein.

Earlier this week the Commission launched separate legal actions against 17 member states over their failure to liberalise the energy market.