"I have announced my intention to exercise my veto," Belusconi told a press conference on the sidelines of a European Union summit in Brussels, following in the footsteps of an earlier threat by Poland.

"Our businesses are in absolutely no position at the moment to absorb the costs of the regulations that have been proposed."

Last year, EU leaders vowed to cut greenhouse gas emissions by 20 percent by 2020, compared to 1990 levels. They also pledged to have renewable energies make up 20 percent of total energy sources.

But many EU nations have begun to baulk at the costs involved and the consequences to industry of the climate change goals which should in theory be nailed down by the end of the year.

Poland's Prime Minister Donald Tusk had earlier chaired a meeting of eastern European leaders who called on their EU partners to "respect the differences in member states' economic potential," in fixing national goals for reducing greenhouse gas emissions.

Berlusconi said it was unrealistic to expect Europe to adhere to strict limits which would not be followed by other industrial powers.

"We do not think that now is the time to be playing the role of Don Quixote, when the big producers of CO2, such as the United States or China, are totally against adherence to our targets", he said.

British Prime Minister Gordon Brown had earlier called on his peers not to abandon their climate change goals, noting that high oil prices and less energy security "makes it more important that we deal with a long-term policy."

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