European Competition Commissioner Neelie Kroes is set to investigate pledges apparently made by the German government to guarantee E1 billion in loans to Gazprom for its E5 billion North European Gas Pipeline project under the Baltic sea.

Ms Kroes is thought to want to know whether the guarantees made by the previous German administration constitute state aid: if so, it is likely that the commission may want to know why Brussels was not notified of the plans in advance.

The commission has requested information from the German authorities so that we can verify that any state support is fully compatible with the EU state aid rules, Ms Kroes’s spokesman was quoted as saying by the Financial Times.

The EC says it expects a response from Berlin by May 12.