"They should use this group better," Howett said.

Howett said the internal dispute about these two aspects of the telecom review threaten to overshadow the third, and in his opinion the most important strand of Reding's proposals: the reallocation of radio spectrum across the E.U.

"Managing radio spectrum is more important but the risk is that attention will be drawn away from this because of the feuding over the regulatory agency and functional separation ideas," Howett said.

Reorganizing radio spectrum can have a dramatic effect on end users, he said, citing the move by British regulator Ofcom last week to allow 3G (third-generation) phones to use the 900MHz frequency used by GSM (Global System for Mobile Communications) mobile phones.

"The Commission plans for reallocating spectrum go far beyond the 900MHz frequency," Howett said, adding that one of the aims was to make popular frequencies more technology neutral.

Reding is expected to unveil the Commission's plans for the review in November. After that, national governments and the European Parliament will debate the proposals for up to a year before a final version is agreed.