Multi-million pound plans to revitalise Newhaven Harbour could be jeopardised unless an EU directive is scrapped, according to a Labour MEP.

Euro MP Mark Watts said a plan to sell the port for £15 million could be at risk because of the draft directive proposed by transport commissioner Loyala de Palacio.

The Market Access to Port Services directive stipulates docks handling 500,000 passengers or three million tonnes of freight a year must put services out to tender every five years.

The proposal is unlikely to reach the EU rule book for two years but Mr Watts said unless it was changed it could deter Newhaven Harbour's buyers.

A French consortium is planning to inject millions into the port, which is currently owned by Sea Containers, and launch a year-round ferry service to Dieppe.

If the directive becomes law, owners of large ports would have to put many services, such as stevedoring and warehousing, out to tender every five years.

Companies which invest heavily, such as the consortium proposing to buy the harbour, are likely to have a ten-year holiday before having to put services out to tender.

Mr Watts said: "The crazy thing is you could buy a port but there is no guarantee you could keep it.

"I think it is going to blight any attempt to relaunch the port and it could make it a lot more difficult for investment to proceed.

"We feel investment decisions will be on hold while this draft directive is at large. We want to kill it at birth."

The proposed French buy-out, which is expected to be finalised soon, has been welcomed by politicians and business leaders as essential for the long-term regeneration of the port and town.

Lewes MP Norman Baker said he doubted the directive would affect the sale or the cross-Channel consortium's investment plans and the new owners would still make a profit from services which were contracted-out.

He said: "Any uncertainty there is at the moment does not help at this time but it does seem to me that this particular suggestion does not pose a threat."

Marek Lorys, of Newhaven Chamber of Commerce, said the directive was aimed at stopping unfair competition but should not hinder the revitalisation project.

Denis Bellenger, chief executive of the Conseil General of the Seine Maritime, the local authority heading the French consortium, said he did not believe the proposed directive would cause a problem.

He said: "We have no problem with the European Union. The important thing is to get the ferry running and making the port available for all to use it.

"We have funding for two to three years and I do not think there will be any problems if we want to renew it."

He said the ferry was being leased for at least two years and if the service proved successful there would be discussions about buying a ship which would be full time on the route.