The British Government has failed to follow European laws in regulating Lloyd’s of London, according to a draft report by EU member Roy Perry.

News agency Reuters, quoting from the report, said “there was failure to observe EU directives up to 1982” and that “failure to correctly apply them after 1982 is a matter of fact”.

Under a 1973 European insurance directive, regulators must ensure that insurers and insurance markets have sufficient reserves to cover liabilities. But Mr Perry’s report said Britain was nine years late in enforcing the directive and then failed to  implement it  adequately.

The revelation comes less than a year  after the European Commission began legal proceedings against the British Government over  allegations that it  failed to properly regulate the Lloyd’s market. The allegations were initiated by Lloyd’s investors, known as “Names”, who lost billions of pounds in the Lloyd’s market in the late 1980s.  The Perry report could help their case to receive compensation.

A European Parliament committee will meet in Brussels next week to decide what action to take over the  report.