EUROPE is reconsidering plans to lift its arms embargo on China in the light of America’s implacable opposition and a new Chinese threat against Taiwan.

Several European Union member states have got “cold feet”, making it “significantly” more likely that the EU will eventually drop its controversial plan, senior diplomatic sources have told The Times.

At the very least, the decision is likely to be postponed.

“Taking our time rather than rushing may not be a bad idea,” one EU official said.

Last week a high-level EU delegation left Washington under no illusion that giving China access to European military equipment would infuriate the US. Congressional leaders have threatened to stop selling advanced military technologies to European allies if the embargo is lifted.

On Sunday Condoleezza Rice, the US Secretary of State, bluntly told the EU not to meddle with the balance of power in Asia. “It is the US, not Europe, that has defended the Pacific,” she declared during a visit to China.

Britain, the Netherlands, the Czech Republic, Scandinavian countries and Luxembourg — which holds the EU’s rotating presidency — are among those having second thoughts. Greens in the ruling coalition in Germany are also uneasy with the proposal. A decision to lift the embargo must be agreed unanimously by all 25 EU member states.

Jack Straw betrayed Britain’s unease on Sunday when he said that the unanimous approval by the Chinese Parliament last week of legislation authorising force if Taiwan formally declared independence had “created quite a difficult political environment”.

US officials are aghast that the EU is contemplating transferring valuable weapons technology to China at precisely the moment that Beijing is indicating renewed hostile intent towards Taiwan.

“The timing of the vote was a disaster for the Chinese,” a senior British official said.

When the EU delegation visited Capitol Hill last week, it was told that China’s anti- secession law would give Europe a “fig leaf” that would enable it to retreat with honour intact. “They were certainly scribbling furiously when we made that point,” an American official said.

France and Germany have led the fight to resume arms sales to China, provided that the sales comply with a new code of conduct designed to prevent China from acquir- ing particularly destabilising weapons. “The French missed an opportunity,” the British official said.

“If they had agreed to strengthen the code of conduct, they could have won agreement. Today it is going to be much harder to get support than a week ago.” Paris and Berlin had hoped that the embargo would be lifted by May. Officials say that the chances are now very slim. Thereafter, Britain assumes the EU’s rotating presidency for the second half of the year and it is unlikely that Tony Blair would champion lifting the arms embargo in the face of American opposition.

Until now, the EU has argued that the embargo, agreed after the Tiananmen Square massacre of pro-democracy activists in Beijing in 1989, is outdated. Proponents contend that China’s new economic clout on the world stage should be respected and welcomed, rather than leaving it bracketed with Burma, Zimbabwe and Sudan, the only other countries with EU arms embargoes against them.

In the light of America’s threatened retaliation, some leading British defence companies have told the Government that they would not seek to sell arms to China in any case.

The Times has learnt that QinetiQ, the Government’s secretive military-based research laboratories — formerly the Defence Evaluation Research Association — has told ministers that it would have nothing to do with selling military technology to China unless the British and US Governments gave explicit approval. BAE Systems said the same last month.

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