(Recasts to add industry comment, background)

By Michael Mann

BRUSSELS, May 20 (Reuters) - The European Commission said on Thursday it would freeze the approval procedure for a genetically modified maize developed by U.S. company Pioneer Hi-Bred International (Nyse:PHB) following a U.S. study which found that a similar pest-resistant grain could kill butterflies.

The Commission warned also that similar products developed by life science groups Monsanto (Nyse:MTC) and Novartis, which are already in use in Europe, could be affected if EU scientists concluded they threatened the environment.

"We would of course want to apply the precautionary principle and there's no way any new products can be approved where this information might have...any bearing on that approval process," said Peter Jorgensen, spokesman for acting EU Environment Commissioner Ritt Bjerregaard.

"But if there are any problems related to this, then of course appropriate action...could also have a bearing on
products already approved," he added.

The latest hold-up in approving new transgenic crops threatens to sour transatlantic trade relations even further at a time when the EU and the United States are locked in conflict over Europe's ban on U.S. beef produced using hormones.

The EU is facing intense pressure from Washington to speed up the approvals process. The U.S. says its farmers lost around $200 million in lost maize exports to Europe last year because genetically modified (GM) crops already grown in the United States are not approved for use in Europe.

American biotech firms complain that European distrust of the new technology is also costing them millions of dollars.

Researchers from Cornell University in the United States reported in this week's Nature magazine they had found leaves dusted with pollen from genetically modified "Bt maize" killed Monarch butterflies.

Bt-corn has genes from the bacterium Bacillus thuringiensis spliced into the plant genes, which makes it resistant to a pest called the European corn borer.

Jorgensen said the Commission would not adopt any final policy stance until the new research had been studied by its own scientists and government advisers.

But in the meantime, the Commission, the EU's executive, would not ask EU environment ministers, due to meet next month, to take a final decision on whether to approve the Pioneer maize.

Pioneer, which is in the process of being bought by Dupont Co (Nyse:DD) , was not immediately available for comment.

A spokesman for Monsanto said the study should be taken in context.

"One study can't be treated as proof," said Monsanto spokesman Tom McDermott. "We need to consider how the findingscompare with other evidence and how the Bt technology compares with other means of controlling the same pest."

To date, the areas planted with Bt-maize in Europe are still very limited, Jorgensen said.

Earlier, in the light of the U.S. study, environmental group Friends of the Earth called for a total ban on GM crops.

"There is no benefit of such crops either for consumers or the environment, but rather a very significant risk," said FoE's Gill Lacroix.

1999, Reuters

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