IN the face of angry opposition from the Minister for Communications, Mr Lowry, EU telecommunication ministers agreed last night to a telephones liberalisation directive that tears up Ireland's long standing five year derogation.

Ministers agreed to proposals from the Commission that will open up the EU members states' markets in voice telephony to full competition by 1998 by insisting that telephone line providers allow interconnectability to rival services.

Subscribers will also be able to hold on to their telephone numbers if they switch telephone company and the directive requires transparency in costings to prevent cross subsidisation and unfair competition by existing monopolies.

Ireland, in agreements made with the Council of Ministers, had been offered the opportunity to defer such liberalisation until 2003 and had actually been preparing for liberalisation by the year 2000.

Last night, the Minister was alone in voting against the political agreement on the final package after Portugal, also entitled to a derogation, announced it was prepared to proceed immediately.

The decision affects only domestic interconnection and means that Telecom's rival for domestic services, ESAT Telecom, will be able to require access to the market from 1998.

At the meeting, Mr Lowry told colleagues the proposals flew in the face of the agreement in May 1993 that members "are granted an additional transition period up to five year" those states particularly vulnerable to international competition.

Political agreement at the time, had only been reached on the directive on voice telephony because of a willingness to accept derogations, he told colleagues.

Such unambiguous agreements, he said, were the basis for plans laid by the Government for the year 2000.

Sources close to the talks expressed surprise that the Italian presidency had pressed the issue to a final vote yesterday, as most states had expected simply to advance the debate. In the end, however, the determination of the Commissioner for Industry, Mr Martin Bangermann, to press forward with his agenda of new technology liberalisation prevailed and the Irish were defeated in a qualified majority vote.