Auto dealers are waiting to hear whether EU trade supremo Mario Monti will bow to pressure from politicians or push ahead with plans expected to cut car prices.

The European Parliament has urged Mr Monti, the European Competition Commissioner, to delay by two years his proposals to loosen ties between car dealerships and manufacturers.

British consumers have been ripped off for too long

Theresa Villiers UK Conservative MP

MEPs voted by 287 to 128 to postpone until October 2005 rules which will herald supermarket-style showrooms, where customers could browse among cars of a number of marques, sold at knockdown prices.

But Mr Monti is not bound to follow the parliament's demands, and industry is waiting to hear whether he will stick to a tough line, or take the more compromising position evident on Tuesday.

He then told a parliamentary committee: "I am prepared to consider a transition period a little longer than we envisaged."

But a day later he said the moves towards delay were, in essence, unacceptable.

"This is an area where the commission has exclusive competence," he said.

Compromise

The reforms, which have been in the pipeline for more than two years, propose to weaken concessions which allow car makers to maintain one-marque only showrooms.

The new rules would also permit the sub-contracting of servicing and repairs, and would make it easier for dealers to sell cars across the EU or on the Internet, to encourage cross-border competition.

The concessions, the so-called "block exemptions" from trade rules applied to other sectors, are set to expire in October, and consumer groups have urged a free market in auto sales.

'Held to ransom'

But the proposals have come under fire from politicians in Italy, France and, in particular, Germany - all countries with a strong tradition of car-making.

The link has raised concerns over the power of national lobbies in the European parliament.

"German interests are threatening real consumer choice by keeping car dealers in restrictive regimes," said Labour MEP Peter Skinner.

"But the parliament must not be held to ransom by a powerful German car lobby with particular vested interests."

Theresa Villiers, Conservative leader in the parliament, said: "British consumers have been ripped off for too long."