The European Commission is heading for a showdown with euro-zone finance ministers in Brussels tonight over its recommendation that Germany be warned about its growing budget deficit.

Mr Pedro Solbes, EU Commissioner for Economic and Monetary Affairs, said he stood by his belief Germany should receive an early warning because its 2002 deficit would be close to the ceiling of 3 per cent of national income specified under the EU's stability and growth pact.

"We were convinced when we approved our draft recommendation that we had to send an early warning to Germany, and we continue to be convinced today," said Mr Solbes after the weekend Group of Seven meeting of industrialised nations in Ottawa. "The figures continue to be the same, and our position was based on figures."

Failure to get support for the warning would be a humiliation for the Commission and would raise questions about the stability pact's effectiveness. The 1997 pact was designed to ensure that Europe's single currency could not be undermined by profligate spending by individual member-states.

Intensive contacts will continue until tonight's "euro-group" meeting. Several large countries seem set to reject the Commission's recommendation when all 15 EU finance ministers meet consider it at tomorrow's Ecofin council.

On Friday Mr Gordon Brown, the UK Finance Minister, telephoned Mr Hans Eichel, Germany's Finance Minister, to tell him Britain would not support the warning.

After the G7, Mr Brown said: "Far too narrow a view of the stability pact has been taken by the Commission generally. It is my view that the pact needs to be interpreted to take account of the economic cycle and the need for public investment."

France and Italy have taken similar positions.

At the G7, Mr Horst Kohler, managing director of the International Monetary Fund, also defended Germany's fiscal policy, arguing that "while vigilance is required in some countries, pre-emptive pro-cyclical measures to avoid a breach are not warranted".

The Commission's proposal will need support of a qualified majority of EU members, meaning the opposition or abstention of Germany, Portugal (also facing a warning), Britain and one other country could block it.

But some officials have suggested criticism of the Commission by Mr Gerhard Schröder, the German Chancellor, may prompt some of his potential supporters to have second thoughts.

The Commission has hinted it might agree a solution provided the early warning procedure could be used again in future. One idea, circulating in Brussels, is that ministers postpone judging Germany until more economic data is available.

Mr Wim Duisenberg, the European Central Bank president, backed Mr Solbes at the weekend, saying: "We fully support the European Commission in its endeavours as guardian of the EU treaty and as guardian of the credibility of the stability and growth pact."

Mr Rodrigo Rato, Spain's Finance Minister and Ecofin chairman, stressed the pact's importance. He warned EU countries would compromise recovery if they put themselves further into deficit, because medium and long-term interest rates were likely to rise.