The European Commission has drawn up plans for a harmonised European diesel duty which, if implemented, would make the fuel cheaper for road users in the UK.

Under the proposals, European Union governments would be obliged to tax diesel at a common rate of about 350 euros (�224) per 1,000 litres, the Financial Times reported on Monday.

The UK government would have to halve its current diesel duty of about 700 euros per 1,000 litres, cutting tax revenues by about �6bn a year, in order to comply.

Diesel duties would also be cut in Germany and Denmark, but would rise steeply in Portugal and Greece.

Opposition

The proposals, which require the backing of all 15 EU governments, are set to be formally unveiled later this week.

They are aimed at eliminating disparities in EU diesel duty rates which, the Commission claims, give some European road hauliers an unfair competitive advantage.

But the plans are likely to run into stiff resistance from governments, including the UK, which oppose attempts by Brussels to assume powers over taxation.

"We believe tax policy is the responsibility of member states," the UK Treasury told the Financial Times.

At present, EU laws set a minimum diesel tax duty of about 245 euros per 1,000 litres.