BRITAIN’s embarrassing showdown with Europe over climate change targets worsened yesterday when the Government was threatened with legal action by Brussels.

The row, which has dogged Tony Blair’s aim of leading G8 nations to tackle global warming, descended into farce after the Government refused to change a demand for an increase to its carbon dioxide emissions allowance.

Margaret Beckett, the Environment Secretary, set out new quotas for emissions, which exceeded levels agreed last year by Brussels. But Mrs Beckett maintains that the levels she set last April were only provisional.

Meanwhile, she gave a guarantee to industry that it could plan for the next three years because the Government would cut any imposed reduction in Britain’s allowance from electricity companies.

Mrs Beckett’s statement came after a turbulent day, which began when a spokeswoman for the Commission said: “If the UK launches its emissions trading system and if the allowances that it places into the system match the allowances foreseen in the plan, we are very happy. If not, then that we consider illegal.”

Brussels is threatening to challenge the Government’s plan before the EU’s highest legal authority, the European Court of Justice in Luxembourg. The EU said it will hold London to its plan to emit no more than 736.3 million tonnes of carbon dioxide. Since then, Britain has added 19.8 million tonnes to the total under pressure from industry. The Commission is already taking action against Germany but a case against Britain when it has made climate change a focus of its G8 presidency would be embarrassing for Mr Blair.

Michael Jack, the Tory chairman of the Environment Select Committee, said: “If this goes to the European Court it will take a long time to resolve and where will that leave emissions trading? This is another example where there appears to be a difference of opinion in the UK understanding of an environmental matter.

“You have got to be seen to be in the lead if you are going to persuade others to follow, which is clearly what the Prime Minister wants to do.

“I am delighted that Britain has recognised the scope and scale of the problem but you have got to make sure your own house is in order if you are going to give leadership to the rest of the world.”

According to a spokeswoman for Stavros Dimas, the Environment Commissioner, there is no longer any legal way that Britain can change the blueprint it submitted to Brussels last year.

When the Commission approved the plan on July 7, it also requested details on four installations in Gibraltar and on the treatment of new entrants on to the market. London eventually supplied the information two days before Christmas.

EU officials explain that according to the emissions trading legislation the Government had two months from early July in which to challenge the decision. In contrast to Germany, which did lodge a complaint to the court, Britain tabled no official objections.

Given the EU’s lengthy legal proceedings, any case against Britain is unlikely to be heard before the second half of the year, ironically coinciding with Britain’s six-month presidency of the European Union.

Chris Davies, the Liberal Democrat environment spokesman in the European Parliament, accused the Government last night “of sacrificing its claims to leadership on climate change by picking an unnecessary and self-defeating fight” with the European Commission. He gave warning that the row would leave British companies confused and uncertain about the amount of carbon dioxide they could emit over the next three years. “How can businesses plan their future strategies with Britain excluded from the scheme? This hardly makes us look like world leaders in the battle against climate change,” he said.

Mrs Beckett said that discussions with Brussels continued despite the legal threat. She said: “The Government believes that the proposed amendment to the national allocation plan is compatible with the requirements of the EU emissions trading legislation.”

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