Michael Heseltine, the President of the Board of Trade, will carry out the review with Lord Sainsbury and Sir Nigel Mobbs, chairman of Slough Estates and head of the deregulation advisory panel at the Department of Trade and Industry.
A ministerial seminar will be held in the New Year to 'see how we can reduce red tape further', John Major told MPs at Question Time in the Commons.
Earlier, Mr Major made it clear to businessmen at a Citizen's Charter conference in London that officials will be urged not to be over-zealous. He said: 'Here in Britain we are sometimes over- punctilious in enforcing directives when lighter controls are tolerated elsewhere.'
The cases the review will cover include charity shops who have been warned that they risk breaking EC rules by selling second- hand toys, and small village grocers who have also had warnings about selling food because of European hygiene regulations.
Downing Street officials cited those as examples of European regulations on which British officials have been 'over-doing it'.
However, Mr Major's office stressed that Britain would continue to uphold European laws.
By announcing the review, the Government is bowing to pressure from business leaders who have complained that they are being left at an unfair disadvantage with competitors in other parts of Europe where the regulations are not interpreted as tightly as in Britain.
But the Government could face criticism if it seeks to relax its implementation of EC directives, such as those on beaches and the quality of sea water, where the European Commission is seen as the driving force behind a cleaner environment.
The Prime Minister ruled out any suggestion that he was prepared to relax the Citizen's Charter standards for British Rail. He told yesterday's conference: 'I will not allow BR or any other public services to lower the standards that the Citizen's Charter has set.'
In spite of widespread scepticism about the charter, Mr Major emphasised his personal commitment to the idea.
However, he said he was angered by the attacks by vested interests.
'You might think, now I live in No 10 Downing Street, surrounded by public servants. . . my anger had cooled. But I can tell you it hasn't.
'Every so often - too often - old memories flood back and it gets stirred up again.'
That happened three weeks ago when the league table of schools was criticised by the teachers' unions, educationalists and the 'chattering classes', he said.
It was the 'age-old defence tactics - misrepresent your opponent's case then dress up self-interest as concern for others', Mr Major said.
(Photograph omitted)Reuse content