Italy and France intend to back Peter Mandelson’s deal to settle the textiles dispute with China today, bringing an end to a protracted row and allowing blocked merchandise to enter British stores as soon as next week.

European Union governments are to vote today on whether to end the textile stand-off with China after Mr Mandelson, the European Trade Commissioner, negotiated a potential truce with the Beijing authorities.

Today, Mr Mandelson said the deal would give European industry "an essential breathing space" as it adapts to the ever-increasing competition from cheap Chinese textile imports and that it would provide a long-term foundation for trade relations between the EU and China.

"It stabilises the relationship. It sorts out a local difficulty and an initial implementation difficulty we had in the agreement we had made and keeps the relationship between Europe and China stable and strong," Mr Mandelson told BBC Radio 4's Today programme.

If the deal is accepted, the green light will be given to end the blockade on up to 80 million items of Chinese clothing, ranging from bras and T-shirts to pullovers and trousers, that are being prevented from entering the European market because they exceed annual quotas agreed in June.

Both the European Commission and the Chinese described the agreement as "fair and equitable", since it proposes to share responsibility for ending the current fiasco. The EU would accept half of all the blocked items on a one-off basis, while the Chinese would offset their share of the backlog against some of their quotas for next year.

Supporters of the deal argue that it would remove a growing source of tension between Brussels and Beijing and would ensure that ceilings on Chinese textiles agreed in the summer would be implemented over the next two years.

EU officials were nervous that the agreement might be blocked by a handful of mainly southern European countries with important textile interests: France, Italy, Spain, Portugal, Greece, Poland and Lithuania. These countries took a tough line with the Chinese last week to try to protect their own producers, but the smaller ones are now expected to fall in line with Italy and France.

Opponents will find it hard to muster enough votes to produce a blocking minority, needing the backing of at least 13 countries.

However, the southern European states are now expected to push for new trade protection measures in return for their support for Mr Mandelson’s plan, Brussels officials suggested yesterday. One possible concession could see the continuing dumping investigation into leather footwear imports from China being speeded up so that additional import tariffs might be imposed this year. At present no punitive action on Chinese leather footwear is expected until April next year.

Sources in Brussels said that Italy and France were likely to lead a group of states including Spain, Portugal, Greece, Poland and Lithuania, that want to protect their manufacturing industries from cheap Chinese imports. The sources said that these states were likely to push for measures such as the introduction of compulsory labelling of country of origin for clothing and new anti-dumping investigations into other merchandise such as shirts from China. Under the agreement, the EU would unconditionally accept about 24 million pullovers, six million bras and nine million trousers from the stockpiles now growing at European ports.

For their part, the Chinese would allow some ten million pullovers, nine million trousers and six million bras to be counted against their quota for 2006. This would have the effect of reducing the growth in permitted Chinese exports of these categories of goods for next year — it would be reduced from the original 10 per cent to between 5 and 7.5 per cent.

The remaining pullovers, trousers and bras would be set against a separate quota for Chinese cotton that has been largely unused this year.

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