European regulators are to overhaul their merger control system in a shake-up that will see the disappearance of the Merger Task Force, the team of officials that scrutinises most deals.

The radical reforms follow a series of court defeats for the European Commission and are likely to change the relationship between companies and the powerful Brussels watchdog.

The reforms will also cause a cultural shift in the Commission, where the task force has long been considered the elite unit.

The proposed changes, likely to be approved by the Commission next month, will see the task force dissolved from 2004.

The power to scrutinise mergers will pass to units that currently look only at antitrust issues.

These four sectoral units covering communication, services, basic industries and consumer goods will begin scrutinising mergers from this year in parallel with the task force.

Once the task force goes next year, its 80 officials are expected to join the sectoral units.

A new unit, which will be headed by a senior Commission official, probably the current task force chief Mr Götz Drauz, is to co-ordinate merger decisions across the competition department.

The move by Competition Commissioner Mr Mario Monti, to dissolve the task force after 13 years is a bold step and could meet internal resistance.

Commission officials said the changes would enable a more coherent approach to antitrust and merger decisions. - (Financial Times Service)