A report prepared for the European Commission President Romano Prodi recommends limiting the national veto over new legislation.

The BBC's correspondent Justin Webb says national governments may seek to water down the proposals

Head of Mr Prodi's group of advisers - former Belgian prime minister Jean-Luc Dehaene - said: "Maintaining unanimity in decision making will bring an enlarged Europe to a grinding halt".

The so-called 'panel of wise men' was appointed to look at ways of reforming the EU, which may double in size over the next decade.

The Commission recently extended the list of nations holding formal talks about entry, possibly bringing in former eastern bloc countries such as Romania and Lithuania, as well as existing front runners like Poland and the Czech Republic.

Romano Prodi: Plans for "European" government

Mr Dehaene and his fellow wise men - former BP chairman and British Labour peer Lord David Simon and former German president Richard von Weizsacker - have also recommended giving increased powers to Commission officials and the European Parliament.

The report says there are clear indications that the systems of European government are not working properly even now in a body of 15 members.

With a union of 25, 30 or or more in the foreseeable future, it says the need for change is obvious.

It suggests the European Commission must still have members from all nations, but it must not become an assembly of national delegates

The BBC's European Affairs Analyst William Horsley says that, in broad terms, the report suggests ways of letting the European Union function more like a sovereign government.

This, he adds, will be welcomed in some EU member states but in others, like Britain, the idea of eroding national powers will be greeted with dismay.

The British Prime Minister, Tony Blair, says his government welcomes a closer partnership with the rest of the EU but is opposed to increasing the powers of the Commission and the European Parliament.