The European Commission has delayed a decision on whether to reform a tax on gadgets such as MP3 players that can reproduce copyright material, the European Union executive said on Wednesday.
"The Commission has decided more reflection is required on this complex issue. When it is ready, it will bring it on the agenda of the Commission," spokeswoman Pia Ahrenkilde Hansen told a regular news briefing.
She said the Commission's delay was not influenced by a letter from French Prime Minister Dominique de Villepin expressing concerns about any scrapping of the levy.
The levy is a tax, imposed by about 20 EU member states, which was designed to compensate artists and performers for the private copying of their works.
EU Internal Market Commissioner Charlie McCreevy was due to publish a recommendation on how the EU should enforce a 2001 copyright directive more stringently.
The directive contains a clause that allows governments to scrap or phase out the tax on products which range from digital music players to copiers and scanners.
Industry sources said McCreevy's plans had been overruled by Commission President Jose Manuel Barroso after the letter from Villepin.
"The Commission has caved in," the source said.
A copy of the letter said: "This remuneration represents for artists a not-insignificant source of revenue which is important to maintain."
Villepin added in the letter that the levy helped protect the cultural diversity of Europe and that the issue required an extensive consultation.
The Copyright Levies Reform Alliance, which represents the electronics industry, said it would hold a news conference later on Wednesday "on President Barroso's decision to withdraw imminent Commission recommendation to reform copyright levies".
McCreevy has faced heavy lobbying over the levy, with the electronics industry calling the tax outdated.
But award-winning film directors Pedro Almodovar and Bertrand Tavernier have said it provided 560 million euros ($743.3 million) in funding for European artists and performers last year.
Collecting societies gather the levy and distribute the money to artists and performers. A quarter of it also goes to national treasuries to fund cultural activities and productions.