The original law would have defined and enshrined in law the talks between energy distributors and consumer groups as "best practice," effectively blocking the cartel office in its role as arbiter of whether or not they created effective competition.

"Rulings by cartel authorities against discriminatory grid access practices will be immediately enforceable," the Bonn based federal authority said in a statement welcoming the decision, which it said had been taken late last week.

An arbitration committee had now reconciled the differing interests and the law would be presented to parliament for passing on April 11, the upper chamber said in a press release.

"Government and (energy distributor and consumer) associations maintain the model of negotiated grid access, but the industry must show it can enhance sector agreements so that they form a secure basis for non-discriminatory grid access," the cartel office said.

"Legal backing for the model...will be granted until December 31, 2003."

The cartel office said in its statement that after 2003, Germany would find a successor model ensuring the implementation of European Union directives on market liberalisation.

"The cartel office, if given the right monetary and staff resources, would be able to assume the role of a... regulatory authority in line with the new EU directive and ensure effective comeptition on the grid-based energy markets," cartel office president Ulf Boege said.

Germany is the only country in the EU to practice self-regulation of its fragemented energy markets, but some consumers and say this keeps prices high and bars new would-be suppliers from entering the market.

Pressure to regulate the German energy market now also comes from inside the government, where the junior partner the Greens wants to allow a cap on renewable energy subsidies payable by certain industries only if the ruling Social Deomcrats agree with stricter access rules.

Details of the results of these separate talks would become available early next week, government sources said last week.

Still more pressure in favour of regulation would come if talks on Saturday to improve access to the gas grid ahead of a mid-April government deadline were to fail.

The talks among the heads of two gas distributor lobbies and two consumer groups aim to draw up a new voluntary (VV3) gas grid access deal to come into force from October 1, 2003.