European Union leaders were yesterday urged to consider fundamental reforms to the European Central Bank (ECB).

Mr Pedro Solbes, EU Monetary Affairs Commissioner, said the leaders should consider "comprehensive reform" when they debate a new EU treaty later this year or early in 2004.

Mr Solbes floated the idea of an overhaul of the ECB's rate-fixing procedures, which have been much criticised by academics for being unwieldy and subject to national lobbying.

He raised the possibility of creating a small monetary policy board to fix rates, similar to the nine-strong body that sets rates at the Bank of England.

Rates are currently decided by the six members of the ECB executive board plus the central bank governors of the 12 euro-zone countries.

The system has been criticised as being unwieldy, especially after the euro zone expands to up to 27 members and liable to central bank governors representing national interests rather than serving as independent experts.

"One idea suggested by academics is to have a much smaller committee setting rates and to move further away from country representation," explained an aide to Mr Solbes.