By diplomatic correspondent Barnaby Mason

The European Union has threatened unprecedented diplomatic action to isolate Austria because of the proposed coalition government which would include the far right Freedom Party.

In the last few days there has been a series of hostile statements from EU leaders describing the emerging coalition variously as repugnant and a monumental mistake.

The EU operates on the basis of constant personal contact between ministers and officials of the 15 member states.

Every EU meeting is accompanied by bilateral discussions on all sorts of subjects in the corridors between formal sessions; it is there that much of the business is done.

The action announced by the Portuguese presidency would not amount to an absolute boycott of Austria.

But if Jeorg Haider's Freedom Party does enter government, contact will be pared down to the absolute minimum.

Contacts will stop

The representatives of the other 14 member states will continue to sit round the table with Austria, but all bilateral political contacts will stop.

Austrian ambassadors in EU capitals seeking meetings with ministers will be denied, and the 14 will not back any Austrian candidate for a job in an international organisation.

This drastic and unprecedented diplomatic action is aimed at reflecting deep unease about the Freedom Party in the European Union.

Mr Haider has expressed hostility to an EU commitment to enlarging the Union by taking in new member states from eastern Europe and he has in the past sympathised with the Nazis.

The European Union has taken a stand; but it still has to deal with the awkward fact that Mr Haider received a big vote in a democratic election and intervention of this kind risks increasing his support at home.