(BRUSSELS) - The European Commission ordered Greece on Wednesday to grant rivals to its state power company fair access to lignite or brown coal supplies, accusing Athens of giving the company a "virtual monopoly."

The European Union's top competition watchdog gave Greece eight months to fall into line or face legal action, a spokesman for antitrust issues Jonathan Todd said in Brussels.

"We expect Greece to, like any other member state, to respect community law," he said. "So we hope that we will not have to start infringement proceedings against Greece."

The Public Power Corp., which generates 85 percent of the country's electricity, holds 91 percent of lignite exploitation rights in Greece, where the fuel is a major source of power production, according to the commission.

"Despite liberalisation of the electricity wholesale market which started in 2001, the PPC continues to enjoy today a virtual monopoly over access to lignite and Greece has protected PPC's dominant position in the electricity market," the commission said in a statement.

The commission said PPC's competitors would need access to at least 40 percent of the lignite resources for a genuine level playing field to emerge in the Greek power market.

"Customers are denied the benefits of competition in the electricity sector when one operator controls virtually all access to Greek lignite reserves," EU Competition Commissioner Neelie Kroes said in the statement.

"Greece should act decisively to establish a level playing field by ensuring, within the framework of its national lignite policy, that competitors have access to substantial volumes of lignite," she added.

The commission spokesman said that Brussels' action was not an endorsement of lignite, which is seen as a poor energy source and is very polluting.

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