EU justice and interior ministers made little progress on Wednesday in efforts to resolve a power struggle between the bloc's three main bodies over anti-terrorism legislation to log telecommunications data.
The row is threatening to derail Britain's goal of reaching a deal before the end of the year on plans to log telephone calls, e-mails and Internet use seen as vital for police to prevent and investigate terrorist attacks and serious crimes.
After the July 7 London bombings, the EU agreed to speed up legislation to require telecoms providers to keep records for at least a year. Britain made the measure one of the top priorities of its six-month presidency of the 25-nation bloc.
The spat has pitted countries such Ireland, France, Denmark, Germany and Sweden, which want the rules adopted by member states alone, against the EU assembly, which has threatened to take ministers to the bloc's top court if it does not get a say.
EU diplomats said Danish Justice Minister Lene Espersen argued strongly in the meeting that inter-institutional battles should not hold up the EU's joint fight against terrorism.
"We have to decide who we are most afraid of - the European Parliament or terrorists," the diplomats quoted Espersen as saying, winning applause from several ministers.
"If Parliament can't help (to get an agreement), then they are not adult enough to take part in the discussion," she was quoted as saying. Questioned by Reuters, Espersen declined to comment on what she had said in a closed meeting, but said: "Things have to be seen in the right context."
The ministers failed to decide whether to press ahead with a proposal by four EU governments or rival legislation from the European Commission which would require the European Parliament's approval.
Instead both proposals will remain on the table and British Home Secretary Charles Clarke will seek a compromise with EU lawmakers, which would give them a say, but ensure ministers the flexibility they want when implementing the plans.
Under the "framework decision" proposed by Ireland, Britain, France and Sweden, EU governments could agree among themselves to introduce a set of minimum rules to ensure law enforcement have access to telecoms data for crime investigations.
The rival draft legislation from the Commission seeks much further harmonisation and would allow the EU assembly an equal say in the decision-making together with ministers.
Those opposed to giving the EU assembly a role argue that the bloc's governing treaties stipulate all decisions in matters of judicial and police co-operation are taken unanimously by member states without Parliament's consent.
Parliament contends that the data logging rules involve regulating the telecommunications sector, which it oversees.
EU lawmakers say their involvement would strengthen the protection of civil liberties, but diplomats say member states are worried Parliament will be open to lobbying from European telecoms companies, seeking to water down the rules.
Industry argues the draft rules would impose massive costs because they require telecom firms to store data for 12 months for possible use by police in terrorism and criminal probes. Some EU states already have such rules.
In a bid to solve the row, Britain has drafted a compromise directive that would require telecoms firms to store data about phone calls for any length between six and 24 months with 12 months as the standard period, British Home Secretary Charles Clarke said.
Records of unanswered calls would also be stored, but it would be left to each state to decide how the industry should be compensated for costs incurred by the measures.