THE dispute over France's attempts to qualify for a single European currency gathered pace yesterday after Germany publicly criticised French budget measures.

The German statistical office issued a formal statement opposing the French government's use of pension fund transfers from France Telecom to reduce its budget deficit.

The statement, published even though yesterday was a holiday in Germany, follows the European Commissions approval of the French move on Thursday. The Commission said the decision was taken because "a large majority" of European Union states supported the French plan.

But several EU countries yesterday insisted there was no "large majority" support. The German statistical bureau said "many European member states" sup ported Germany's position that it would be "economically sensible" to exclude the France Telecom payment from the budget.

The row reflects growing German concern that the Commission's hasty approval of France's budget measures could lead other countries, such as Italy, to use similar measures - undermining the integrity of the single currency qualification process.

Investors are becoming worried that Germany's determination to make the single currency credible could lead some of its institutions, such as the constitutional court, to block the process on technical grounds.

On Tuesday, European central bank governors will meet at the European Monetary Institute (EMI) to discuss countries'

progress in meeting the criteria for qualifying for the single currency. The EMI and the European Commission will then publish separate reports.

A committee of lending European statisticians will hold an emergency meeting on Monday evening in response to the Commission's decision.