(BRUSSELS) - A key panel at the European Parliament voted late on Tuesday in favour of requiring power companies to split their generation businesses from their transmission networks.

Lawmakers on the parliament's industry committee rejected a French and German-backed proposal that would have watered down EU plans to boost competition with an alternative to requiring power firms to break up.

Eager to boost competition, the European Commission proposed in September that integrated power and gas companies should hive off their retail distribution networks or allow them to be run by an outside operator.

After the proposals sparked an uproar from some of Europe's biggest energy groups, a group of eight EU countries led by France and Germany gave the commission a joint proposal for a third way to shake up the sector.

However, in a close vote only on the electricity market, the parliament's industry committee voted in favour of requiring the full separation of power companies' generation and distribution businesses, rejecting the other two options.

"I think that the vote for us meant that we put consumers back in the driving seat on energy policy," said British Socialist lawmaker Eluned Morgan, who sheparded the bill within the committee.

"I think that there was a feeling very much that the whole agenda was being driven very much for the needs of industry," she told a journalists on Wednesday.

"While that is very important we have to keep the focus on the needs of the consumers in particular in this time of rising energy prices," she added.

The full parliament is due to vote on the plans in a June 16-19 plenary session in Strasbourg while EU energy ministers, who are deeply divided on the package, are struggling to reach an agreement also for June

"I think that this vote will strengthen the hand of the majority of member states that for full ownership unbundling as the only option," Morgan said. "I hope that it's given confidence to the commission to pursue this very vigourously."

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