THE Government may have to seek permission from the European Commission to delay the liberalisation of the telecommunications market beyond 1998.

The need to seek permission is one of the recommendations of the European Parliament, which has proposed that existing derogations should only be sanctioned for countries which submit a detailed request, including a liberalisation timetable, to the Commission.

The Parliament endorsed legislation yesterday ordering member states to fulfil their pledge to open all telecommunications markets to competition by 1998.

The vote, although advisory, clears the way for the European Commission to adopt the last major piece of its telecoms liberalisation plan.

Ireland, Greece, Portugal and Spain have already won a five year derogation on the 1998 deadline, although they may now have to seek permission to avail of these derogations.

The Minister for Communications, however, has said he intends to introduce full competition by 2000.

Industry groups, such as the Telecommunications Services Policy Group, which represents both suppliers and consumers, have consistently called on the Government to introduce competition as quickly as possible.

They argue that competition in this sector is vital if Irish companies are to have access to advanced services at competitive rates.

The Government has always maintained that Telecom Eireann requires time to adjust to a fully competitive marketplace.

Telecom is currently negotiating a possible strategic alliance with a number of international telecommunications companies. This latest move by the Parliament will make it more difficult for Telecom Eireann to form an alliance while arguing for a derogation, an industry source said last night.

The EU executive is likely to enact the new rules next month, a Commission official said.

In addition to setting the 1998 deadline in stone, the legislation requires EU states to begin to allow "alternative networks" such as those operated by utilities or railways to compete with traditional phone monopolies to carry some telecoms services.

It said a provision allowing a two year delay for "very small networks", namely Luxembourg, should be stricken off altogether.

But EU Competition Commissioner, Mr Karel van Miert, told the deputies he would have trouble changing an accord that had been reached "in good faith" between the Commission and national governments.

"I ask you not to push too far on that," he said.

Mr van Miert said he doubted that most countries would actually use the transition periods.

The Commission is adopting the rules under a treaty article allowing it to act without formal approval of national governments.

It has already adopted similar legislation requiring governments to end state monopolies over mobile and satellite communications and to allow cable TV operators to carry some telecoms services.

The new legislation will knock down the last bastion of the state monopolies - basic voice telephone service to the public.