THE EURO is in trouble, finance ministers are drowning in sovereign debt, and Brussels insiders say UK lobbyists have about as much credibility as a Greek bond. So why has the Department for Business stuck out its neck on audit reform?

A leaked BIS email called on European counterparts to lobby against the European Commission's proposed audit reforms and provided a draft briefing to coordinate member state complaints, the International Accounting Bulletin reported.

Big Four insiders said BIS has been "sympathetic and responsive" to their concerns about the proposals, which include mandatory auditor rotation and joint audits for the largest companies.

Frequent dialogue between BIS and accountancy's top dogs might explain the government's eagerness to ensure anti-audit reform voices carry weight in Brussels.

One Big Four insider said the firms "know everything" BIS is up to, and "have to be told in advance" if its activities will significantly affect their business.

However, the mid-tier is also confident of its rapport with BIS. One top-ten firm spokesperson agreed the leaked email was "not very helpful", but insisted their relationship with the government department remains "good".

The email is all the more surprising given recent developments, including the referral of the audit market to the Competition Commission.

Brussels has implied its reforms will reduce concentration at the top of the market, and recent government actions - including the House of Lords inquiry and subsequent Office of Fair Trading investigation - suggest the coalition shares Brussels' concerns.

So why the apparent volte-face? Could it be that government is happy with a little nip-tuck in the UK, but an EU-wide regulatory cudgel is a bit too scary?

BIS has "severe concerns" that some of the EC's proposals "do not support EU growth ... impose unnecessary regulation on business" and could damage audit quality.

Mandatory joint audit and pure audit firms are its biggest bugbears, and it fears auditor rotation will be expensive and unpalatable to clients on quality grounds.

One critic has suggested the email is a "misguided" civil servant effort rather than a political statement, arguing it does not reflect the UK's official stance.

However, the force of its message and presumed distribution list might suggest something else - that BIS thinks Brussels' reform is a load of rubbish, and is prepared to put its money where its mouth is.

Experts have criticised the European Commission's approach to audit reform, saying proposals bear no relation to supposed problems, and the whole shebang stems from internal markets commissioner Barnier's deep dislike of the Big Four.

Given the sensitivities around audit reform and the UK political backdrop - Cameron recently faced his biggest parliamentary revolt as 79 backbenchers called for a referendum on Europe - it seems BIS's dislike of Barnier's plans is too strong to be stifled.