The issue has split the House, with some MEPs fearing that such an inquiry might harm the European Commission, in particular External Relations Commissioner Chris Patten. Some MEPs have instead proposed to launch a joint working group, made up of MEPs from the Budget, Budgetary Control and Foreign Affairs Committees. This idea is also being supported by Chris Patten himself.

Change of mind

Although previously in favour of an inquiry, German Conservative MEP Armin Laschet said his views had changed after an exchange of letters with Chris Patten over the last few months, where the Commissioner provided "detailed and clearer" answers than anything that the Commission has put forward before. He added that the written answer from the Commission "is a good basis for close co-operation between the European Parliament and the Commission on further control of the monthly budget aid going to the Palestinian Authority."

In a letter to his colleagues, Armin Laschet however also opposed the continuation of direct budgetary assistance. "Despite my decision against a committee of inquiry we should continue to oppose any further direct budgetary assistance to the Palestinian Authority and ask the Commission to focus on bilateral co-operation on EU-funded projects instead." This proposal has been opposed by some Social Democrats and Greens in the European Parliament.

Working group a pale substitute

UK Conservative MEP Charles Tannock, who favours an inquiry, described the working group proposed by Mr Laschet as a "pale substitute". Speaking to EUobserver, Charles Tannock said that this working group does not have enough resources. "We will still be campaigning for a full inquiry," he said.

Leftist German MEP Ilka Schröder, another strong advocate of the inquiry said, "anyone who is willing to investigate is fine. But the point is that the working group has no power, no resources and no competencies, as it is not in the rules of procedure. It’s good that it would be investigating, but it alone is not enough. It’s something completely different," she said.

Patten against committee of inquiry

The External relations Commissioner Chris Patten is strongly opposed this type of inquiry, leading some MEPs to suppose that the Commission might have something to hide on this matter.

"It would not be appropriate to cast doubt on our actions in the Middle East at a moment when the EU together with the Quartet [EU, US, UN, Russia] have become the main actors able to broker peace in the region, in particular thanks to its actions and aid packages delivered during the last years...To date [there is] no evidence to support claims that EU monies are being used to fund terrorism," Commissioner Patten said in response to a letter from Mr Laschet.

"Once the Israeli authorities will resume the transfer payments on a stable and regular basis, the EU will seek to return gradually to more targeted forms of financial assistance," the Commissioner added.