The European Commission said yesterday that it would decide "in a matter of days" whether to take action against the two senior Eurostat officials allegedly involved in fraudulent activities.

Commission President Mr Romano Prodi yesterday requested and received several pages of additional information on the case from Olaf, the European Union's anti-fraud watchdog. "We are taking this very seriously," Mr Prodi's spokesman said. "If there are grounds to act, we will act."

The move comes after yesterday's revelation that French prosecutors have opened a preliminary criminal inquiry following an investigation by Olaf that uncovered "a vast enterprise of looting" of EU funds.

The fraud is alleged to have occurred in connection with a contract between Eurostat and Planistat, a French economics and statistics consultancy, and is believed to have involved a Luxembourg bank account that was outside the scrutiny of EU financial controllers.

Olaf passed files on to the French authorities, identifying two Eurostat officials suspected of having set up entirely or in part this system: Mr Yves Franchet, Eurostat's long-serving director general, and Mr Daniel Byk, a Eurostat director.

The two men have denied the allegations and insist they had no access to the bank account and that it was used for official purposes only.

Yesterday, Mr Franchet and Mr Byk, who were attending a seminar held in celebration of Eurostat's 50th anniversary, both declined to talk to the press.

In his short address to an assembly of leading statisticians, EU politicians and functionaries, Mr Franchet did not mention the allegations that had surfaced only hours before.

Luxembourg Prime Minister Mr Jean-Claude Juncker was also due to attend but cancelled at the last minute saying that he had to prepare for a speech.

Mr Pedro Solbes, EU Monetary Affairs Commissioner and the man responsible for Eurostat, made no reference in his address to Mr Franchet, who has led the statistics body for 16 years.- (Financial Times Service)