European Union law-makers on Wednesday backed a compromise among EU governments to open up natural gas markets to increased competition without breaking up the large energy companies that dominate countries such as France and Germany.

Paris and Berlin last month pushed through a compromise that watered down original plans from EU headquarters that would oblige companies to choose between running energy infrastructure, such as gas pipelines, or supplying the gas that runs through them.

Endorsing an alternative

Instead, they endorsed an alternative to unbundling, which allows companies to retain ownership of pipelines, but under independent supervision to prevent them shutting out competitors in gas supply.

The European Parliament voted by a large majority on two motions that endorsed the government compromise, but demands safeguards to prevent discrimination against new market entrants, such as the appointment of an independent trustee and a supervisory committee.

Functioning market

"The idea is to really have a functioning market," said Atanas Paparizov, the Bulgarian Socialist who authored one of the motions.

It also says a new regulatory agency should report on the functioning of the system within five years with the possibility of ordering complete unbundling if it's not working.

In addition, the parliament said consumers should have the right to switch contracts with competing gas companies without charge and should be compensated for poor service.

The EU's electricity and gas markets - valued at about euro340 billion (US$530 billion) - remain fragmented by national borders.