The Netherlands, Ireland, Italy, Denmark and Austria have rallied behind the UK in trying to get the requirement for quarterly reporting made optional, while France, Germany and Portugal pushed for the measure to become mandatory.

The groundswell of reaction against the requirements is the second blow to the European Commission's draft directive on transparency. The objection from the working group for the council of ministers comes alongside a report from the European parliament by rapporteur Peter Skinner, which also suggested that quarterly reporting should be offered to individual nation states as an option only.

Under the EU's co-decision procedure, any changes to the draft have to be approved by both parliament and the council before it can go ahead.

The objections from both sides of the process may not remove all requirements, but a meeting of EU finance ministers, held on Tuesday, was likely to spell the end to mandatory full financials signed off by an auditor every quarter. The results of this meeting have not yet been made public.

'There seems to have been progress on both sides and it now looks very promising,' said Nigel Sleigh Johnson, head of financial reporting at the ICAEW. 'There is still intensive negotiating to come, but it looks likely that there will be compromise.'

One option under consideration is a requirement to make listed companies produce an unaudited trading statement every quarter that would not require companies to provide detailed financial information.

But some have argued that this could cause further problems. 'It is more difficult to prepare a trading statement without giving figures than it is to produce a quarterly report,' said Tom Troubridge, head of London capital markets at PricewaterhouseCoopers.