The European Commission is expected today to adopt proposals that would introduce competition into the public transport systems of European Union member-states. But it is likely to agree exemptions for big cities such as Paris and Berlin, where modes of transport are integrated. "The aim is to provide competition to any supply of public transport in the EU but there will be some possible exceptions for railways for security reasons and some local integrated transport systems," said Ms Loyola de Palacio, the European transport commissioner. The proposals are controversial, especially in France, where the government is unwilling to break the monopoly on transport systems in big cities such as Paris.

Ms Palacio's proposals mean that all public transport contracts over a certain size must be put out to public tender every five years. But the operators will also have to sign up to public service obligations, such as honouring tickets from rival companies. Commission officials visited Britain to learn the lessons of bus services deregulation and transport privatisation. Ms Palacio said her proposals aimed to strike a balance between deregulation and completely closed markets.

Ms Palacio also plans to put forward proposals for creating a European single market in air transport at the Stockholm summit early next year. Ms Palacio, who is also energy commissioner, is urging EU countries to complete the single market in energy by early next year. The EU has seen 65 per cent of the electricity market opened to competition and 80 per cent of the gas market. But France, Germany and Luxembourg have not yet implemented rules opening up the gas market, due to be in force by August 10th.