THE European Union threw down the gauntlet to Boeing and McDonnell-Douglas yesterday saying their planned 14 billion (Pounds 9.2 billion) merger should be blocked under EU anti-trust law unless it was changed.

EU sources said competition experts from all 15 EU countries had agreed at a meeting in Brussels that offers made to date by Boeing for the deal to pass muster were "not sufficient".

"If adequate remedies are not offered the proposed concentration should be prohibited," one source said, summing up the experts' conclusions.

Sources said the experts - an advisory committee - had unanimously agreed with the European Commission competition officials that the merger would add to what was seen as Boeing's already dominant position in the aircraft industry.

"Commitments offered so far by Boeing are not sufficient to prevent such a strengthening of dominant position," another source said.

The sources said the Commission, the EU's anti-trust watchdog, planned in the next few days to find out whether Boeing was prepared to come up with further offers to allow the deal to go through.

The Commission is known to have three main concerns about the deal.

It opposes Boeing's exclusive contracts to supply planes to certain airlines, notably Delta, American and Continental.

It also worries about the effect of the deal on the defence industry, McDonnell-Douglas's main sector, and on the overall size of the deal.

The Commission estimates that the merger would give a 70 per cent market share to Boeing/McDonnell-Douglas.

Europe's position is in sharp contrast to that of US anti-trust authorities.

Federal trade commissioners agreed by four-to-one earlier this week not to challenge any aspect of the deal, saying McDonnell-Douglas was no longer a competitive force in the commercial aircraft market.

They did, however, say that Boeing's exclusive contracts were "potentially troubling".