The future for European biotech may be looking up as the EU commission supports a report calling for less regulation and more support for the beleaguered industry.

On Thursday the European parliament discussed a hard-hitting report on the "Future of the biotechnology industry" by Scottish MEP John Purvis. During the debate commissioner for enterprise and IT, Erkki Liikanen expressed the commission's support for the "basic thrust" of the report and promised a commission study on the industry within months.

And next week prospects for the controversial cutting edge science will be on the agenda at a key meeting of European heads of state in Sweden.

The debate is not before time, Purvis told ePolitix that so far: "Europe's ambivalence, delay and procrastination has put us behind the competition not just in the US but other countries which have a forward looking biotech policy".

He hopes his report and the top-level discussions at Stockholm will lead to an EU action plan prioritising the industry.

The story of European biotech is one of fast growth with the number of companies expanding nearly fourfold in the five years from 1995.

Research and development in the field has increased from over one billion euros in 1995 to over three billion in 1999 and there has been a three-fold revenue increase in the same period.

With growth like this, the future should be bright and getting brighter for the sector.

But Europe is being outstripped. Many other countries are investing in biotechnology too and Europe far from leading the field may become "the customer of others" in a key technology of the future.

As Brazil, Canada, China, India, Israel and Japan all rush to jump on the bio-bandwagon the EU risks losing the industry altogether, warns Purvis's report.

"This would have a knock on effect on other industries, most notably the pharmaceutical industry, where biotech is likely to become the growth area for the future. Already there are signs of emigration by companies involved in seeds and plants due to the negative attitude in Europe to GM crops," the report warns.

Just as the industry's growth figures are impressive, evidence of a growing GM gap between the EU and key competitors in the US and China is alarming to the industry's supporters.

Industry revenues in the US outstrip those in the EU by a staggering ratio of 4.2 - 15.7 billion euros compared to 3.7 euros here. Europe is falling down in research and development investment too, by a 3.6 ratio or 8.3 billion euros in America and 2.3 billion in Europe.

In the key area of crop science Europe is on the ropes. Seventy per cent of worldwide GM crop plantings take place in the US - in 1999 35 per cent of corn and nearly half of cotton was GM. New kid on the world trade bloc, China approved 26 GM applications between 1997 and 1999.

But in the EU only eight crops have been approved to date - four varieties of maize, one soybean and three types of oilseed rape.

In medicines too, the EU hits the GM gap. Over 350 bio-pharmaceutical medicines are on clinical trial in the US and 107 are in the last trial phase. These figures are compared to 100 clinical trials in the EU with just 14 in the final phase.

Purvis is clear who he blames for the biotech crisis and his report attacks the EU's legal and regulatory framework for the industry - particularly for crop science.

Article 16 of directive 90/220 has been used by some member states to put bans on GM products for "safety reasons". In some cases the commission's own scientific committees have found the bans unjustified.

No authorisations under the health directive have been approved since October 1998, in spite of little or no scientific evidence of a health risk posed by GM, a "de fact moratorium on all development" says Purvis.

Countries like France, Denmark, Italy, Greece, Austria and Luxembourg have refused to sign up to tough new rules on GMOs agreed in February. And the countries have vowed to continue blocking new permits for biotechnology.

EU commissioner for research, Philippe Busquin concedes that EU regulations have caused problems for the industry.

"In the use of genetic modification techniques, certainly the research community may have been frustrated by some of our regulations, and we have been revising these regulations - seeking to simplify and lighten them where possible," the commissioner told ePolitix.

Accepting that the EU's "precautionary principle" had led to delays in the first stages of the technology, Busquin said: "The precautionary principle may sometimes call for over-cautious response, and this may be important for public reassurance but it is a starting point. The first moratorium on genetic engineering work, in 1974 to 1976, was for certain specific types of experiment. Once we had clear rules in place, and had undertaken some more research, it became possible progressively to relax those regulations."

John Purvis is concerned that in the drive to reassure public opinion European governments and the commission have caved in to anti-scientific and scare driven arguments.

"Governments, the commission and some MEPs are guilty of reacting to emotional and uninformed arguments, particularly from vested interests like the greens, rather than sticking to the facts. This has had a terrible effect," the MEP told ePolitix.

Whilst the DTI welcomes a new debate about the outlook for biotech the UK government still strikes a cautious tone.

A source told ePolitix: "We want to see biotech high on the agenda and want the commission to develop an EU wide strategy for biotech. Europe needs to do more to exploit the opportunities and benefits of the technology but we have to remember that the confidence of citizens in the member states is crucial. The precautionary principle must remain central to the debate"

John Purvis believes that the authorities should take a more robust view and give strong and forthright support to the industry.

"The government needs to put its head above the parapet or else the argument is lost by default and we are going to lose out," he said.

Commissioner Busquin is also concerned about negative stereotyping in the biotech debate.

"The new technologies should not be seen in a negative Frankenstein monster way. They are not only opportunities, they are sometimes necessities. The GM technologies are offering us remedies for previously incurable diseases, safer vaccines, better foods, and products and processes more friendly to the environment. The arguments are mainly about the speed of introduction," he told ePolitix.

But consumer champions and GM opponents, Friends of the Earth, are not ashamed of the emotive use of words like "Frankenstein" to describe biotech - they have used the term in 21 press releases since 1999.

Food campaigner, Adrian Bebb, told ePolitix that the word Frankenstein is "very descriptive, we have no concerns about raising public awareness in that manner".

Bebb believes that public concerns about food will continue to hit the industry but thinks that the bio-pharmaceutical sector will grow.

"The growing criticism about the way GM foods are tested is spreading globally and puts a question mark on GMOs already released. This will have an impact on the industry and we have already seen companies shedding 'life science' operations. The big companies are unsure. The public don't have such a problem with medicine. The pharmaceutical sector is much more tightly regulated and the public have more faith in it," he said.

Charlie Kronick, head of Greenpeace's genetic engineering team, told ePolitix that he was "full stop opposed to GM release" and only sees a future for biotech if it restricts itself to assisting "conventional plant breeding".

"Where the biotech companies can help with real problems on the ground we would be delighted to see it," Kronick said.

In the industry, Desmond DeSouza, public and government affairs manager at Aventis Crop Science thinks that the tide may be finally be turning for beleaguered biotech and looks forward to getting his message across to the public.

"In the UK over the last months there has been much more balanced reporting in the media. There still remains a lot of concern over new technology but industry has started to get information about the technology to the public in easily digestible form. We need to build on that in a climate where people are not trusting of science," he told ePolitix.

DeSouza argues that the challenge for Europe is persuading countries like France and Austria to sign up to existing rules on GMOs. Aventis, he argues, will support rigorous new rules because at least with a framework there is "a clear timescale to work to, and to bring products to market".

The debate over the benefits or threats of biotech will continue to rage regardless of what happens in Stockholm and many supporters of the industry believe it can be won. Next week's task for heads of state meeting in Sweden will be to ensure that healthy debate is not at the expense of a growing industry.