Ditching unfettered competition as an EU treaty objective sends a bad protectionist signal, although it will make little difference in practice, European internal market commissioner Charlie McCreevy said yesterday.

EU leaders struck a deal last week on a detailed mandate for a new treaty to overhaul the 27-nation union, removing "free and undistorted" competition from the EU's stated aims, on the insistence of French president Nicolas Sarkozy.

Mr McCreevy, one of the EU executive's leading free-marketeers, said Mr Sarkozy's move was not a political surprise since protecting French industry featured heavily in his election campaign. However, it was a tactical shock, slipped in at the last minute at the EU summit.

McCreevy said he first heard of Mr Sarkozy's move last Friday. The change would have little legal impact, but there was a question as to how courts would interpret it, he said.

"Perception is everything in politics and life. On that basis, this is going back to a protectionist reflex. I don't think it's a good thing," Mr McCreevy said.

After a last-minute counter-attack by business leaders, competition enforcers and lawyers, the European Commission persuaded member states to add a protocol reaffirming the legal basis of EU competition policy.

Competition commissioner Neelie Kroes, McCreevy's partner in enforcing open markets, assured a European Parliament panel yesterday: "The competition rules which have served European citizens so well for 50 years remain fully in force.

"And the European Commission will continue to do its job as the independent competition enforcement authority for Europe, fairly but firmly."

Mr McCreevy said the omission of the treaty objective would not stop either Ms Kroes or himself pursuing cases just as zealously. Nor did it open a new front in the EU's fight with some member states over protectionism, since those battles already existed, he added.

France was not alone in its resentment of Brussels' sweeping powers to regulate pricefixing cartels, illegal state aid to industry and big corporate mergers.

"Lots of countries want to hide behind someone like Mr Sarkozy. It's my view for some time that, in reality, many countries give lip service to open and free competition. Not everyone among the policymakers in the EU believes in true and open competition anyway," he said.

The former minister for finance's current job is to enforce the free movement of capital, services, people and goods in the EU's internal market.

"If the commission is not seen to stand up to all these things, then who is then left to stand up?" Mr McCreevy asked.