The European Commission (EC) has demanded that the German government suspend its controversial deposit system for drink cans and bottles until it can present a system which is in line with EU rules.

In a letter to the German Chancellor, Gerhard Schroeder, Commission President, Romano Prodi, asked for changes to the system which came into effect at the beginning of the year.

However, the German Environment Ministry has turned down the EC request, saying it expected the system to be fully operational by the beginning of October with deposit centres which would be in line with EU laws.

A government spokesman was reported as saying that it would be too costly to suspend the current provisional system only weeks before the fully operational and EU-compliant system came into operation.

Last month, industry groups withdrew from a commitment to set up a national network of recycling machines. Many of the deposit machines are yet to be installed so as it stands, to reclaim their deposit, customers have to keep their receipts and return the bottles or cans to the store where they bought them. The EC said this ran counter to EU competition rules.

Chancellor Schroeder wrote to the Commission earlier this month, saying that separate deposit centres would soon be set up and requesting that the EC not take legal action.