The proposed amendments to forthcoming EU legislation are designed to strengthen the hand of firms facing hostile bids, according to the European

The British approach is more entrepreneurial. The German is controlled, it's more bureaucratic

Hugh Herring British Chamber of Commerce, Germany

Parliament.

Put forward at a late stage in a 10-year consultation process, they would also strengthen workers' rights to information in the event of a takeover bid.

Both British businesses and the UK government are opposed to the amendments.

"We have already made clear to our European partners that we would not accept the amendments," said a spokesman for the UK Department of Trade & Industry.

"It is undemocratic, shifting control away from the owners of the business to boards, who are able to mount all sorts of defences during the course of a bid and actually frustrate the shareholders from exercising their own votes," David Howard, Lord Mayor of London, the man in charge of promoting London as an international financial centre, told BBC Radio 4's Today programme.

More ammunition

The draft legislation - which the proposal sets out to amend - says that until a takeover bid is made public, the board of a target company will not be allowed to mount defensive actions - beyond seeking a better offer - without shareholder approval.

The proposed amendments would give the boards of target companies more ammunition when faced with takeover bids and release them from the need to consult shareholders first.

Proposed amendments

The boards of companies will be given greater powers Workers must be consulted Any defensive action agreed by shareholders will be allowed An "equitable price" will be defined The bid may have to be paid in cash

But workers would need to be consulted before any offer could be accepted - the intention being to save jobs.

And a clear definition of an "equitable price" would be included in the legislation, along with a demand that in some instances this would have to be paid in cash.

It is common that predator companies pay for target companies with shares.

Culture clash

The proposal highlights the differences between British and European ways of doing business.

In the last 50 years we have only had four hostile takeovers [in Germany], so the social acceptance is very low

Heinz Klandt, European Business School

These differences were clearly illustrated by the hostile takeover of the German telecoms company Mannesmann earlier this year by its UK competitor Vodafone.

In continental Europe, the aggressive British corporate culture is both alien and unwelcome, so the Vodafone bid came as a total surprise for Mannesmann.

"In the last 50 years we have only had four hostile takeovers [in Germany], so the social acceptance is very low," Heinz Klandt, professor at the European Business School in Frankfurt, Germany told the Today programme.

Hostile Anglo-Saxons

UK companies tend to focus on whether shareholders accept a hostile bid, with little, or no, consultation with workforces.

The European Parliament will vote on Wednesday

"The Anglo-Saxon approach, and in particular the British approach, is more entrepreneurial. The German is controlled, it's more bureaucratic," Hugh Herring of the British Chamber of Commerce in Germany told the Today programme.

The European Parliament will discuss the proposal late in their day on Tuesday and vote the following morning.