The incoming European Commission is to fight for jobs and growth at the expense of red tape, Peter Mandelson, the Trade Commissioner designate, promised business leaders on the first morning of the Confederation of British Industry's annual conference here.

Mr Mandelson, who has written a paper for fellow commissioners on the damage caused by regulation, said that the administration being formed by Manuel Durao Barroso, the EU president, would focus on boosting innovation rather than on European convergence.

The "mythical federal European ideal went down the road some time ago and is not going to come back", Mr Mandelson said.

The Barroso administration was to become the "growth and jobs commission, and to be clearly defined as such", he said. "That's what I call back to basics."

New regulations would be introduced only if their ends could not be achieved by less invasive means. While regulations enforcing the single market had added 2 per cent a year to European economic growth, red tape threatened the equivalent of 4 per cent of GDP.

"If European regulation matched the best regulation in the rest of the world it would make a significant improvement to household incomes," he said,

However, the commission would battle to enforce existing free-trade regulations which were being inadequately followed by member states.

"We must pick the right fights, win them and go from strength to strength," he told the audience at the International Conference Centre. "That's what I believe the Barroso commission will do."

He added: "The political climate exists for something to be done."

The comments followed an attack by John Sunderland, the CBI president and chairman of Cadbury Schweppes, on Europe's "damaging and frustrating" failure to foster economic growth while Asian countries boomed. The eurozone economy grew in the July-to-September quarter at an annual rate of 0.5 per cent. China, meanwhile, grew by 9.1 per cent.

"The EU still produces directives which ignore competitiveness and even threaten to wipe out entire sectors," Mr Sunderland said.

Mr Mandelson acknowledged that, at the conference, there was "not as much pro-European fervour as perhaps ten or 15 years ago", blaming the decline in part on the economic failures of former Labour governments.

However, he urged Britain not to give up its position in the European Union in favour of joining countries such as Norway as members of the European Economic Area.

"For Britain, associate membership of the European Economic Area would create business uncertainty and mean lost inward investment," he said.

"We need a strong British voice batting for British interests. No way can we have that with associate membership of a club that is run in the interests of its full members."

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