But the significance of the Commission's survey for the year 2002 is tempered by its omission of a €37.5bn (£26bn) bailout scheme for Network Rail, the rail infrastructure operator.

The Commission believes that recent EU jurisprudence means the Network Rail package does not qualify as state aid, even though the official UK state aid total for 2002 was a tenth of the size of the Network Rail bailout, at about €3.7bn

The figures for the entire Union show that subsidies are falling overall, but at a slower pace than in the late 1990s, despite a promise by EU leaders in 2001 to crack down on state aid.

The French government has since clashed with Brussels over aid packages to companies such as Alstom, the engineering group, Bull, the computer manufacturer, and Electricite' de France.

Some Commission officials fear that plans hatched by Germany, France and the UK for a new "super-commissioner" to boost competitiveness could further inhibit Brussels' battle against subsidies, since Paris and Berlin have both argued that the Commission should be more understanding when dealing with bail-out schemes.

The Commission "state aid scoreboard" says total state aid by the 15 member states was €49bn in 2002, a fall of about €1bn from the year before. But, in a break with previous years, the report omits aid to the rail sector, one of the biggest sources of national subsidies. It traditionally also fails to include subsidies granted by the EU itself.

The reduction in state aid in the 1990s was faster than the current rate of decline, largely because of reduced subsidies to regions in Germany and Italy. The overall volume of comparable aid fell from €67bn in 1997 to €52bn in 1999.

In 2002, Germany granted the most aid, €13bn, followed by France, €10bn and Italy, €6bn.

According to a draft of the report, Denmark granted proportionately the most aid, at almost 0.9 per cent of gross domestic product, and the UK the lowest, since Britain's €3.7bn of officially notified aid represented only 0.24 per cent of GDP.

However, the report commends Denmark, since it says almost all of its aid is "horizontal", rather than dedicated to specific companies or sectors.

It adds that aid for research and development has risen sharply in both the UK and Italy. However, Germany and France both granted far more, €1.6bn and €1.1bn respectively.