EU in chaos as MEPs flex their muscles to force last-ditch climbdown by leadership

The European Commission was in unprecedented disarray last night after MEPs scored a victory by preventing a new team of commissioners from taking office next week.

In a day of high drama, the incoming Commission president, Jose Manuel Barroso, promised to revamp his team after facing certain defeat in an important confirmation vote in Strasbourg.

It creates the most serious crisis since 1999, when the Commission, led by Jacques Santer, quit in disgrace over sleaze allegations. It also marks a historic advance for a newly-assertive European Parliament.

The outgoing Commission, led by Romano Prodi, will stay on in a caretaker capacity while Mr Barroso seeks to assemble a team acceptable to MEPs.

It could prove a challenge for Mr Barroso, who has been accused of under-estimating the extent of the crisis facing him. MEPs had been incensed by comments made by Rocco Buttiglione, Italy's commissioner-designate for justice and home affairs, who described homosexuality as "a sin".

The leader of the 200-strong Socialist bloc of MEPs described the moment as a "watershed" for the European Parliament. Chris Davies, leader of the British Liberal Democrat MEPs, said: "This European Parliament has been accused of lacking teeth. Today it bit back."

Although a parliamentary committee had rejected Mr Buttiglione's appointment, its vote was non-binding. However, MEPs had the "nuclear option" of vetoing the entire team of commissioners, a power they have never used.

After negotiations with EU leaders and discussions with groups of MEPs on Tuesday night, Mr Barroso concluded he was destined to lose a vote on the Commission if it were held, as scheduled, yesterday.

In a humiliating climbdown Mr Barroso, who last week accused his critics of being extremists, agreed to their central demand for a reshuffle of portfolios. "The changes must be made in the team," he said, adding that it is "better to take time to get it right" but that he hopes to settle the impasse "in the next few weeks".

Mr Buttiglione, whose job would entail some responsibility for civil liberties, is destined to be the prime casualty of the crisis, although last night the Italian government had not yet withdrawn his nomination. Five would-be commissioners could be affected by a reshuffle and Mr Barroso will have to resume haggling with national capitals over their nominees.

Last night, the Netherlands said it was standing by its designated competition commissioner, Neelie Kroes, who was also criticised by MEPs on the grounds that her links with business could produce a conflict of interest. That suggested that Mr Barroso, whose candidature for the job was promoted by Tony Blair earlier this year, faces a tough fight. Although EU governments are unlikely to want to create even more chaos, Mr Barroso could find his position being questioned by MEPs if he fails to broker a deal.

The crisis has evolved into a power struggle between the institutions. When MEPs' objections were brushed aside, they concluded that Mr Barroso had sided with EU leaders in the European Council, such as Mr Berlusconi. Mr Prodi, by contrast, had good relations with the European Parliament, but lacked support in the Council.

The row also underlines the fact that Mr Barroso, who has power to assign jobs to commissioners, made the original mistake by allocating the justice and home affairs portfolio to Mr Buttiglione. Allies of Mr Barroso, a former prime minister of Portugal, put a brave face on his setback yesterday. Peter Mandelson, the UK's designated commissioner for trade, said: "I think it is better to have the right Commission on a cross-party basis of support than to have pushed this through when feelings are running high on both sides.

"I believe he [Mr Barroso] will get a renewed mandate and come back with a strong mark-II team. There is no doubt that changes will be inevitable."

But the confusion is likely to last for weeks. Assuming Mr Barroso can get agreement for a reconstructed team from heads of government, the European Parliament will want to hold further committee hearings to vet those who are taking up new jobs. There will then be a vote in a full plenary session to approve the team on 15 November. The leader of the Socialist bloc, Martin Schulz, said: "If he comes back with the same commission, things will be very difficult for him. Mr Buttiglione is one thing, but there are others."

But Jonathan Evans, leader of the British Conservative MEPs, said centre-right members would want to examine the new team, adding: "I fear that some concessions are going to be offered to Socialists, Greens and Communists."

Neil Kinnock, one of 30 European commissioners who will now remain for several more weeks as caretaker ministers, said that the parliament was evolving, adding that the result would be "a stronger EU including a stronger parliament".