A "knee-jerk reaction" to recent scares over hazardous Chinese toys and toothpaste entering Europe could see customs posts being re-erected at borders, Europe's leading industry group believes.

BusinessEurope, the pan-European employers' lobby, fears that politicians could roll back the achievements of the single market, the EU's biggest success, as they tighten controls on imported goods.

Industry-friendly plans to extend the use of a pan-European quality mark are set to come under fire in the European parliament next week. The CE mark, which allows goods to be imported into the EU and circulate without inspection, based on internal company controls, has been criticised because many customers believe it represents a safety standard.

The Socialist group, the second biggest in the parliament, want the controls to be toughened, and is being backed by leftists and Greens representing a near-majority.

"What's shocking is that until now not many people knew that the CE mark carried no safety guarantees," said a spokesman for the group. "How many dangerous toys are on the shelves that we don't know about?"

However, Vincent McGovern, of BusinessEurope, said the mark was a success and its extension was vital to complete the single market. Governments often use quality controls to bar goods from other states, he said. A quarter of trade in the 480 million-strong bloc is not covered by harmonised rules.

The standards regime was introduced in 1980 after French attempts to block cassis imports on dubious quality grounds were struck down by the European court. "The single market works - but only at about 70 per cent of capacity," said Mr McGovern. "We support these changes."

"The worst thing now would be a knee-jerk reaction. If [ the reforms] do not function properly you are going to start erecting border posts again."

Governments should conduct better checks rather than piling costs on to industry, he said.

Günter Verheugen, the industry commissioner behind the plan, agrees. He wants to shift the burden of proof so that governments would have to show why a product was substandard before they could block it. But Meglena Kuneva, the EU consumer affairs commissioner, launched a two-month review of toy safety this week.