EU FINANCE ministers have strongly criticised elements of a €200 billion European Commission stimulus package designed to stave off a prolonged European recession.

They have also forced EU competition commissioner Neelie Kroes to water down a set of commission guidelines outlining the measures governments can take to rescue banks.

"She radically changed her approach," French finance minister Christine Lagarde told journalists at the end of an EU finance ministers' meeting attended by Ms Kroes.

Ms Lagarde said Ms Kroes had agreed at the meeting to redraft a commission communication due to be published this week on the state aid guidelines for banks.

France, Germany and other member states strongly criticised the state aid guidelines set by Brussels to cover bank guarantees and recapitalisation plans for not offering enough flexibility to participating institutions. There are concerns the existing guidelines are too complex and this is causing unnecessary delays to the approval of member states' aid schemes and the release of funds to banks and consumers. Swedish finance minister Anders Borg accused the commission of not being constructive and warned ministers "had to call off these legions of state aid bureaucrats".

Earlier, German finance minister Peer Steinbrück said Berlin, Paris and other EU member states were unhappy with the commission's approach to vetting state aid to banks caught up in the financial market crisis. "We do not approve of the schedule of the procedure and above all of the commission's speed," he said.

Ms Kroes said in a statement that the commission expected banks that received state aid to give commitments to lend to the real economy.

EU finance ministers also raised concerns about elements of the commission's €200 billion financial stimulus package announced last week. EU leaders will consider whether to support it at a summit in Brussels next week.