ITALY has accused the French Government of engaging in market abuse and discrimination against Enel that sabotaged the Italian energy company’s plans to acquire Suez.

The allegations are contained in a memorandum sent to Charlie McCreevy, the EU Competition Commissioner, which will further inflame the dispute between Italy and France over the French Government’s role in the merger of Gaz de France and Suez because it refers to the role of senior French ministers in the affair, including Thierry Breton, the Economy Minister.

A document has been sent to the European Commission which refers to a decision by Veolia, the French water company, to pull out of a venture with Enel to acquire and break up Suez. According to the document, Veolia quit the project shortly after the French President Jacques Chirac phoned Silvio Berlusconi, informing the Italian Prime Minister of French concerns about Enel’s “hostile” intentions.

This contradicts Veolia’s assertion on February 23 that it was not involved in a plan to take over Suez.

A spokesman for the Commission said the allegations concerned violations of the directive on market abuse, infringement of the free movement of capital and violation of the principle of non-discrimination.

Italian sources said that the document states that Enel and Veolia hatched plans for a “non-hostile” takeover of Suez last November.

However, the project was exposed in the Italian press on February 21, prompting protests from French ministers. President Chirac also protested the following day and hours later, Veolia said that it would end all dealings with Enel.

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