The European Commission's attempt to broker a deal over controversial new accounting standards for derivatives received a blow on Monday, when four countries showed their opposition to the measure.

The Commission had been moving towards an agreement with the International Accounting Standards Board over the new standards, which bankers fear will make earnings more volatile.

But on Monday, France, Italy, Spain and Belgium all lined up against the likely deal. That leaves Brussels with little time or scope to endorse standards due to be implemented by some 7,000 listed companies in the EU from January 1.

A deadlock over the proposals on derivatives, known as IAS 39, could jeopardise the attempt to converge EU accounting standards with those in the US.

The Commission has already endorsed the main part of the IASB's recommendations. But unless Brussels also decides that the proposals on derivatives should also become law, US authorities may not accept the new European standards as an alternative to US General Accepted Accounting Practice.

Many European banks argue that the IASB's approach of showing derivatives at "fair value" is unsuited to instruments used to hedge against interest rate movements rather than for speculative gain.

On Monday the banks won more support than expected among EU member states.

The Commission had hoped that France, the standards' most vocal opponent, would be relatively isolated after recent progress in talks with the IASB. The board is prepared to make alterations in presentation and consider more fundamental changes proposed by the European Banking Federation.

While the opposition falls short of a blocking minority under transitional rules, the Commission is wary of proceeding on such a controversial subject without more support.

Six other countries, including Germany, are undecided on the measure. If even the mini-states Malta and Luxembourg were to join the opponents of the deal, it would be politically almost impossible for the Commission to endorse the measure.

Brussels has asked national governments to give their formal positions in writing by the end of the month.

The Commission had hoped to recommend the measure in July, paving the way for its final legal adoption in November.

Instead, Brussels will now have to focus on winning back from member states in the little time it has left.