Malta does not agree with a German proposal to impose a new EU tax on airline fuel in order to boost development funding for Third World countries.

The proposal is set to be submitted formally by the German Finance Minister during a meeting of EU Finance Ministers today in Brussels.

However, sources close to the Council told The Time there does not appear to be consensus between member states on the issue. The same sources said Malta is one of the countries set to oppose the proposal together with Ireland, the UK and others.

Prime Minister Lawrence Gonzi and Parliamentary Secretary Tonio Fenech will be representing Malta at today's meeting.

Although the proposal has been in the offing over the last weeks and was also mentioned during the G8 finance ministers' summit in London last week, the European Commission did not take an official position on the issue.

Laszlo Kovacs, the commissioner in charge of tax policy cautioned, however, against the EU adopting such a tax without first seeking broader international support because kerosene duties could put European airlines at a competitive disadvantage to non-EU rivals. The US has already declared it had no intention of imposing the tax on its airlines.

The Association of European Airlines, representing 31 European airlines including Air Malta, reacted angrily to the plan, saying this initiative would lead to the collapse of the very fragile European airline industry.

The Greens within the European Parliament said they "strongly supported" the proposal and would seek to use their party's influence in member states to push it through. The Green Party is arguing that it is unfair that airline fuel is not subject to the same taxes as road and rail fuel.

Questions sent to Air Malta by The Times over the issue remained unanswered.