Conservative claims that the EU is moving to harmonise tax across Europe have been dealt a blow by the European commission prompting the accusation that the Tories are scare-mongering on Europe.

In an "unprecedented" intervention, the commission said the proposals under discussion fall short of the full tax harmonisation the Tories claim is on the agenda.

A commission spokesman said: "The Tory claims on taxes are nothing but scare-mongering. They are trying to suggest that income taxes, petrol taxes, VAT and every other tax will soar under Labour and thanks to Europe."

Frits Bolkestein, the internal market commissioner responsible for EU taxation issues said: "The document clearly states that there is no need for the harmonisation of national tax systems."

"I am not in favour and will never be in favour of any harmonisation of income taxes," Bolkestein said.

In the leaked document, Bolkestein argues that "efforts must be made to achieve a durable reduction in the overall tax burden in the EU, by ensuring a balance between cutting taxes, investing in public services and sustaining fiscal consolidation". Bolkestein repeated this position yesterday.

However, William Hague was undeterred by the commission's reassurances. The Tory leader told a rally in Newark yesterday that "more and more of the rights and powers of the British people are being signed away."

Commenting on the commission's comments , the shadow foreign secretary, Francis Maude, accused the EU of "an outrageous intrusion" into British politics. The FT reports that Tory europhiles are already planning a post-election campaign to press Tony Blair to use his electoral mandate to lead the UK into the European single currency.

Gordon Brown added yesterday that membership of the euro would involve sharing sovereignty with other EU countries.