A fierce row over EU moves to label oil from Canada's massive tar sands reserves as highly polluting looked set to deepen when talks between experts from the 27-nation bloc ended in stalemate Thursday.

Canada, which had threatened to retaliate should the European Union tag its tar sands oil as specially harmful to the environment, welcomed the result.

"We are pleased to see that many EU countries are opposed to this discriminatory measure," said Natural Resources Minister Joe Oliver.

Canada, which is sitting on the world's third largest reserves thanks to tar sands in Alberta, had warned it would lodge a complaint at the World Trade Organization if a committee of 345 EU experts voted in favour of EU proposals affecting the fuel.

But "the committee failed to give an opinion, there was no qualified majority for or against," said European commission spokesman Isaac Valero Ladron.

The issue will now go to EU environment ministers meeting in June. If approved it would then be put to the European parliament.

Committee members from Britain, France and Germany abstained in the vote, while those from Italy voted against, diplomatic sources said.

Sweden and Denmark approved the proposals, notably a table setting greenhouse gas values for unconventional fossil fuels which is part of the bloc's bid to reduce carbon emissions by 20 percent by 2020.

Tar sand oil, whose extraction environmentalists say will wreck the climate, is estimated to cause 22 percent more greenhouse gas emissions than conventional crude.

"Unconventional fuels need to account for their considerably higher emissions through separate values," said the EU's climate commissioner Connie Hedegaard.

After fierce lobbying from oil corporations and the pressure from Canada, Thursday's vote was seen as a key test of the EU's ability to implement its climate change policies.

"With all the lobbyism against the Commission proposal, I feared that member states' experts would have rejected the proposal in today's experts committee," said Hedegaard. "I am glad that this was not the case."

But environmental groups were less pleased.

"Intense pressure from the Canadian and oil lobbies means we have missed a chance to keep high-polluting sources of fuels, such as tar sands, out of Europe," said Friends of the Earth campaigner Darek Urbaniak.

Greenpeace EU transport policy adviser Franziska Achterberg said: "The evidence is clear: tar sands are the world's dirtiest fuels. The decision is even clearer: ministers should stand up to the oil industry and ban them from Europe."

"Now that the tar sands issue is finally in the hands of publicly accountable ministers, we will see who's pulling the strings in Europe.

The Commission proposals make it clear to buyers that unconventional sources have far greater greenhouse gas values than average crude oil, ascribed a value of 87.5 grams per megajoule of fuel against 107 for oil sands.

Canada, which refutes the EU calculations, is with Venezuela the world's top tar sand oil producer but does not export to Europe.

It hopes to triple production by 2020 and is planning pipelines through the United States, which have triggered protests from environmental groups. European oil giants such as Shell, BP and Total have invested in the Canadian fields.