The European Parliament said Friday it had formed a working group to investigate whether the City of Strasbourg charged the assembly too much rent on two buildings.

The informal group of 10 lawmakers, which was put in place by the parliament's budgetary control committee, hopes to meet with the mayor of the northeast French city, Fabienne Keller, on May 15.

Eurodeputies voted massively last week not to sign off on the parliament's 2004 accounts for six months to give them time to look into irregularities in the cost of renting the buildings.

"There are solid reasons to believe that we are dealing with a serious case of fraud with a cost of at least 27 million euros (34 million dollars) to the EU budget," conservative MEP Valdis Dombrovskis said on April 27.

The row centres on a plan by the parliament to buy the two buildings from a Dutch company, SCI-Erasme, the actual owner, which currently lets them to Strasbourg, which in turn sublets them to the parliament.

A price of 136 million euros (170 million dollars) was provisionally agreed based on the rent parliament pays.

But the budgetary control committee suspects that the parliament has been overpaying for years and decided to freeze further payments as well as the plans to buy the buildings.

The working group hopes to complete its work by the middle of July.