Without reform, the report warns, the European Union could grind to a halt as it brings in new members from Central and Eastern Europe. "The increase in numbers of the EU member states creates the risk of its dilution," the report warns. "If enlargement is to happen, it must be by preserving the achievements of 40 years of European construction."
The blueprint, circulating yesterday in draft among senior officials, radically raises the stakes for the Inter-Governmental Conference on EU reform which starts next month.
Though the commission is not directly involved in the IGC, its views are highly influential. They will enrage Tory Euro-sceptics, and show that the commission is once more trying to take the lead on reform as it did under the presidency of Jacques Delors. His successor, Jacques Santer, has so far taken a more low-key approach.
On the question of vetoes, the report calls for qualified majority voting on interior and justice policy, specifically on immigration. More majority voting is essential in foreign policy, says the commission paper, except where military action is considered or where essential interests of a member state are concerned.
Even more controversially, the blueprint says that in future no country should have the right to veto alterations to the EU's founding treaties.
At the moment Britain maintains the right to block proposals on fundamental changes to EU rules made during an IGC. The Government has thus been able to frustrate the intentions of more federalist states.
The commission idea would mean that countries who wish to move faster towards federalism in certain areas would be able to do so, and Britain would not be able to stop them. The result would be a carefully planned system of "flexible geometry" whereby some member states could proceed to pool powers in areas of their liking at a faster pace than others.
In a clear reference to Britain, the paper says: "Maintaining unanimity will lead to paralysis. The European Union must not be condemned to progress at the pace of its slowest member . . . If the treaties can only be changed by unanimity . . . the chance of real progress in European construction will be undermined."
The commission document, entitled Reinforcing Political Union and Preparing for Enlargement, tackles head on the most acute dilemma at present facing the EU: how to bring in more member states without diluting the union and creating unworkable institutions.
It says the future EU must establish a "common defence" policy with defence ministers meeting regularly as a council. At first their remit would be limited to peace-keeping. But the paper envisages a time when EU powers would extend to the territorial defence of Europe.
The document calls for an end to Europe "a la carte", allowing a country like Britain to pick and choose which policies it wants to sign up to. The social opt out should end, it says.
The commission paper makes far-reaching proposals for streamlining institutions. The President of the commission should have far greater powers after enlargement. He or she should have a greater role as representative of the EU in foreign policy issues, and should have a say over who sits as commissioners. He should also have the right to "reshuffle" commission portfolios.
The number of members of the European Parliament would also have to be slimmed with new electoral systems after enlargement if it is not to become unwieldy. At the same time, however, the document calls for strengthened involvement of national parliaments in EU decision making.
The commission proposes reinforcing the EU's powers in the area of human rights, in particular by including new rules in the treaties banning racism and xenophobia as well as other forms of discrimination.