At the St.

Malo meeting, Mr Blair and his French hosts urged the EU to re-examine its commitment to abolish duty-free shopping at its next summit.

Mr Blair also said he would discuss some aspects of tax harmonisation with the EU in spite of the British media outcry that it would mean tax increases.

The French Prime Minister, Lionel Jospin, said Brussels did not want to impose fiscal uniformity or higher taxes on member-states but to remove tax oases and unfair competition.