Claims that an influential European working party is to push ahead with an investigation into tax harmonisation among member countries has been denied by officials.

The European Convention, chaired by former French president Giscard D'Estaing, is set to appoint working groups to tackle the EU's most pressing problems.

It was claimed that among these will be potential tax harmonisation among countries that have joined the Euro, which could lead to pan-European pricing from car manufacturers.

The group would also look at whether there were powers to force countries to meet certain tax guidelines.

The main aim of the group is to prepare the EU for the effects of enlargement, with several countries set to join the EU in the next few years.

A spokesman for the European Commission denied the working party would be looking at tax to that extent.

She added: 'Tax will be discussed, but certainly not to that extent.'