The European Commission is to investigate a decision by transport secretary Stephen Byers to allow a white horse landmark to be carved into a site of conservational interest.

The White Horse Millennium Landmark will now be cut into the chalk at Cheriton hill in Folkstone, despite advice against the proposal from English Nature.

Friends of the Earth have argued that the decision sets a precedent, allowing major planning projects to be approved for such sites, and have written to the commission calling for the inquiry.

"This is a very important wildlife site in its own right. It's a site of special scientific interest, designated for its national conservation importance. It is also a special area of conservation, designated under the EU habitats directive for its international conservation importance," said spokesman Craig Bennet.

"So there's concern about damage to the site itself and English Nature, the government's wildlife watchdog have been vociferous in their opposition to this. But the real concern here is that the secretary of state for transport, Stephen Byers, who you would have thought had other things on his mind at the moment, has rejected English Nature's advice.

"And that sets a very dangerous precedent. That makes us at Friends of the Earth think, this isn't a White Horse it's a Trojan horse and the back door through which permission is given to airports, ports, roads in wildlife sites," he said.

A transport department spokesman said: "We will wait for what the European Commission has to say, but any intergovernmental correspondence would be confidential, as per normal procedure."

However, shadow chancellor and local MP Michael Howard welcomed the announcement.

"This was a proposal that had widespread support in Folkstone. When it came before the planning committee, every Conservative councillor and every Labour councillor voted in favour of it. It was the only the Liberal Democrats that voted against it," he said.

"The evidence for damage was rather speculative. I don't think they proved there would be any damage. And in the end, you have to balance all these decisions and I am delighted that Stephen Byers came to the decision that he did.

"It's a terrific position, it's a great design and we think it is something that will cheer everyone up."

English Nature are "very disappointed" by the decision, a spokesman said.