Sotheby's and Christie's, the world's two leading auction houses, could face heavy fines and multimillion pound lawsuits after suffering one of the most serious blows to their reputation in their 300-year history.

In a preliminary finding, the European Commission has concluded that they conspired to fix prices over a seven-year period.

Their image as high-class purveyors of artistic masterpieces to the rich and powerful has already been severely tarnished in recent years by revelations about collusions to fix commission fees in the US and Europe.

The two-year investigation has reached the preliminary conclusion that, between 1993 and 2000, the two illegally agreed to raise fees charged to sellers at auctions.

The Brussels authorities found that the collusion had been agreed at the highest level, with private meetings in London and New York between Mr Alfred Taubman, then chairman of Sotheby's, and Sir Anthony Tennant, his Christie's counterpart.

The investigation followed a similar probe by the US authorities. A fine by the Brussels authorities could pave the way for a series of multi-million-pound lawsuits from the two houses' clients. The two companies have already paid $512m to settle a US class-action lawsuit and British clients of the two companies have been reported to be considering legal action.

The two have six weeks to respond to the preliminary finding.