"The fact that several countries have expressed their interest in hosting the institute proves that it is an interesting project", EU education commissioner Jan Figel said on Tuesday (11 December), stressing that "Europe's future lies in world-class innovations".

Brussels believes the European Institution of Innovation and Technology (EIT) could help attract bright young brains as well as bridge the innovation gap between the 27-nation bloc and its major rivals, the US and Japan.

In practice, the EIT is expected to result in partnerships of universities, research organisations and companies.

In 2006, the union invested 1.85 percent of GDP into research and development, far from its 2010 goal of three percent. By contrast, the US spends around 2.7 percent.

"Some topics are so complex that individual member states are not capable to resolve them on their own", Mr Figel said, referring to climate change, renewable energy and the next generation of information and communication technologies.

There are no specific requirements related to where the ETI should be based, although European lawmakers have suggested the body is located "near existing centres of European excellence and academic reputation".

According to Polish socialist Adam Gierek, Poland's Wroclaw city would fit such requirements.

Hungarian socialist MEP Edit Herczog, for her part, argued that Hungary is "quite a leader in the area of research and development" when compared to the other countries that joined the EU bloc in 2004.

Austria would be good for scientific networking, as the country borders four new EU states as well as Germany, Switzerland and Lichtenstein, Austrian conservative Paul Ruebig said.

However, according to some MEPs, where the institute is situated is not so important.

"We don't want a new bureaucracy", said Jan Hudacky from the parliament's committee on industry, research and energy, adding that "it should rather be a virtual organisation coordinating and encouraging those stakeholders, who take part in the innovation partnerships".

The Slovak conservative MEP has also voiced some scepticism about the extent to which some member states, especially the new ones, will be able to participate, as the main idea behind the EIT is to pull together those most excellent centres and universities.

"I think countries which don't have research and development centres or top universities will have problems becoming part of the partnerships", he said.

Under the agreed rules, three different organisations from at least two member states should participate in one of the EIT projects, selected by the institute governing board responsible for steering the its activities.

The institute will operate with a total budget of €2.4 billion from 2008-2013, with €308.7 million coming from EU coffers.

But the bulk of the investments are supposed to come from public and private partners as well as from the institute's own activities.