European Union finance ministers will tonight put pressure on banks to avoid charging for currency exchanges between the euro, the future single European currency, and national denominations.

The move - which endorses a European Commission plan - is designed to increase the euro's popularity among EU citizens, and forms part of an overall package to ease potential confusion during the transition period from 1999 until the end of 2001.

The euro and national denominations will co-exist during that period, before the official introduction of euro coins and bank notes in 2002. Other provisions include common standards for dual pricing of goods in retail stores, and the establishment of national watchdogs to help co-ordinate the transition period in member-states.

The Commission yesterday put the three-point plan on the agenda of tonight's meeting of economic and finance ministers at the Brussels summit.

Ministers are expected to approve a recommendation in which banks adopt a "standard practice" not to charge for non-cash conversions between the euro and national currencies, cash transactions for small amounts, and the one-time conversion of accounts from national currencies into euros. Banks will also be discouraged from charging different fees for accounts held in euros and accounts held in national currencies.

The issue is likely to prove controversial among some currency exchange operators. A senior executive of one London-based currency exchange company indicated that his company would probably ignore the advice and charge a "handling fee" for cash transactions. He said it would still cost money to handle and store banknotes, even in the absence of an exchange-rate risk under Economic and Monetary Union.