The Spanish prime minister, Jose Maria Aznar, has expressed support for Britain in its dispute with Germany and France over harmonising taxes within the European Union.

Speaking in Brussels, Mr Aznar said healthy tax competition helped to promote economic reform and efficiency.

He also made it clear that Spain opposed German and French calls for an end to the right of EU member countries to veto tax proposals.

The British prime minister, Tony Blair, has said he is determined to defend essential British interests, while remainingengaged and positive over Europe.

Mr Blair is expected to make it clear that Britain will use its veto to block moves to introduce Europe-wide taxes when he meets the French prime minister, Lionel Jospin, in France tomorrow.