The EC's internal market commissioner, Frits Bolkenstein, is expected to take a hardline stance against the UK government over its regulation of Lloyd's during the mid-1990s, according to EC sources.

A decision will be made on the possible Lloyd's infringement proceedings on 21 September, Bolkenstein confirmed to Conservative MEP for the South East, Roy Perry, on Monday night.

"If Bolkenstein wanted to throw the petition out, he could have done it weeks ago," said the source.

Perry told Insurance Times that he was "optimistic" about the decision and was heartened by Bolkenstein's hard line on the issue.

"He has reiterated that he is taking the issue very seriously," he said.

The decision is awaited in response to petitions raised by Names and former Names at Lloyd's which were forwarded to the Commission to investigate. The Names allege the UK government failed to transcribe EU directive 239/73 (requiring the establishment and maintenance of adequate solvency margins) quickly enough into UK law. They also allege that when it was finally transcribed, the UK government failed to apply it.