The United States Ambassador to the European Union has warned that European companies could face "negative consequences" if the EU pushes ahead with proposals to drop its arms embargo to China.

Ambassador Rockwell Schnabel, a close confidant and advisor to President George W Bush, told Times Online that opposition to the prospect of the EU lifting the arms ban was "right at the top" of Washington's agenda.

The embargo was imposed in 1989 because of Beijing's human rights abuses following the crackdown on pro-democracy demonstrators in Tiananmen Square.

"Our position on this matter is quite clear. Although we do a massive amount of trade with China, we feel that it is premature to discuss a lifting of this embargo. People involved in the Tiananmen protests are still in jail," Mr Schnabel said.

Asked how a lifting of a ban could affect European arms manufacturers, he said: "There is a large amount of joint development on weapons systems between the US and the EU. But the idea that our people could face weapons developed in part by the US is unthinkable.

"We hope there will be a resolution on this issue. If the EU were to press forward, exchanges of technologies would be examined. There would be consequences. It would be a very negative thing."

The ambassador's comments came shortly ahead of a statement made today by the EU foreign secretary, Javier Solana, indicating that Europe felt a lifting of the ban was necessary to "build trust" with China.

Speaking in Washington, Senor Solana, a former Secretary General of Nato, said the ban should have been lifted "a long time ago" and noted that Australia lifted its embargo in 1992.

The US administration has consistently spoken out strongly against resuming arms sales to China despite assurances from the EU that it would impose a restricting code of conduct.

"What is important is to have a sentiment of trust, of confidence, and nobody in the European Union wants to put American soldiers in difficulty," Senor Solana said.

"We think if we maintain the only sanctions left, so many years after Tiananmen, that puts China on the same level as countries like Myanmar and Zimbabwe."

The Chinese Premier, Wen Jiabao, has described the sales ban as "discriminatory". Speaking at a China-EU summit last year, he said its abolition would open the way for a more stable political environment.

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