The European Parliament finally gave the go-ahead for the Insurance Mediation Directive on Monday.

And now the Directive has been approved, it will spark publication of the Treasury consultation paper on UK insurance regulation by the end of October.

But brokers are worried that if the FSA's consultation paper is not published soon afterwards, the time available to consider the proposals will be "squeezed".

Grant Ellis of The Broker Network said: "It has given us a date in the calendar to work with, but as it has already been delayed from July, the consultation period is being squeezed.

"I don't think we can wait for the FSA paper to be published. The danger is waiting for the FSA to publish its proposals when we should be talking to it now and helping to formulate the plans," he said.

London Market brokers' committee executive director David Hough welcomed the approval.

"We are pleased that the Directive has been adopted and will inevitably facilitate the opportunity working across borders. It also establishes a minimum standard across the EU.

"But it does mean the industry is now facing statutory regulation," he added.

A spokeswoman for GISC reiterated Ellis' point that the industry could not discuss the proposals until it had seen both the Treasury and FSA consultation papers.

"Overall it does herald a new phase towards the industry adopting statutory regulation. This approval means the gun has been finally fired after we were left on the starting blocks back in July.

"There is a practical importance that these consultation papers are properly discussed," she added.

A spokesman for the FSA said that its paper would not be published until after the Treasury's document had been released.