The EU has fined nine Member States a total of €320 million for breaking annual milk production quotas. Italy in particular has been singled out as the main offender and is due to pay a sum of €234 million, the Commission confirmed on Thursday.

Countries that over-produced milk in the 2002/3 seasons will all be fined, but some will face heavier fines than others. After Italy, Austria faces the biggest fine - €35.4 million - while Portugal, which has long sought an increased quota for producers in the Azores, will have to pay €2.5 million.

Other countries penalised included Belgium, Denmark, France, Luxembourg, the Netherlands and Finland.

Italy had previously threatened to veto EU proposals for tax on savings unless it was allowed to write off earlier fines. The Italians owe €650 million in fines for previous quota excedents.