(BRUSSELS) - The European Anti-Fraud office on Monday launched an enquiry into media allegations that a senior EU official gave market-sensitive information to reporters posing as business lobbyists.

The official in EU Trade Commissioner Peter Mandelson's department went on annual leave at the end of last week after the London Sunday Times informed the European Commission of its allegations.

"The European Anti-Fraud Office (OLAF) has opened a case file today and is assessing the information," the body said in a statement.

At the end of the preliminary "assessment" a decision on whether to open a full-scale investigation will be taken, said OLAF, known by its French acronym.

The preliminary OLAF investigation is more bad news for the official under scrutiny as the commission has already opened its own internal enquiry into the matter.

The allegations are particularly embarrassing as the European Commission has announced a concerted effort to keep an eye on the myriad lobbyists who deal daily with officials in Brussels.

The Sunday Times said it had a recording of the senior official revealing secrets to the undercover journalists who offered money from a Chinese businessman seeking insider trade information.

He allegedly leaked the names of two Chinese companies likely to get special status if the EU imposes a protective tariff barrier against Chinese candle-makers.

"The information is potentially worth millions to those trading with these companies," the paper wrote.

The Sunday Times said the trade official had discussed the possibility of accepting payment or taking a job with the businessman, but underlined that he did not agree to accept either.

But it added that his actions appeared to breach EU staff regulations, which state that officials must "refrain from any unauthorised disclosure of information received in the line of duty."

The European Commission, the EU's executive arm, negotiates global trade agreements on behalf of the 27 member states of the European Union.

Commission spokesman Johannes Laitenberger told reporters in Brussels that he could not be drawn on the allegations, as they are now part of an ongoing investigation, adding that the official involved had asked for annual leave.

Jorgo Riss, for Alter EU (the Alliance for Lobbying Transparency and Ethics Regulation), said the allegations "speak for an environment within the EU Commission where you have not much to fear and where a lot happens in an untransparent way."

In June the European Commission announced a new initiative to keep a close eye on the lobbyists, launching an online registry for the thousands of lobbyists gravitating around Brussels. But it is a voluntary system.

Organisations that decide to participate have to provide basic information such as who they are, their objectives, areas of interest and how they are funded. Commercial lobbyists acting on behalf of someone else will have to reveal their clients.

However of an estimated 15,000 individual EU lobbyists so far only 316 groups have registered across Europe, including just three think-tanks and two law firms.

European Commission spokeswoman on fraud, Valerie Rampi, admitted that the figures were too low and expressed the hope that more of the big players will sign up following the summer break.

She said the commission would give the scheme a year before reviewing it.

"We have always said that we favoured a voluntary approach. But we have always said that should this approach not work then the commission would not shy away from its responsibilities."

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