A European Public Prosecutor’s Office will tackle the annual loss to fraud of £431m of EU funds according to proposals published by the European Commission yesterday.

The proposed office will follow up every case of suspected fraud against the EU budget. This will have a strong deterrent effect, the EC says, especially in the context of the current legal loopholes that allow fraudsters to go free.

However, under EU treaties, the UK will participate only if it decides to opt in.

The EC claims that EPPO will ‘entail no substantial additional costs’ to member states and says that national courts are free to challenge EPPO decisions through judicial review.

The proposal, according to the EC, guarantees stronger procedural rules for individuals than currently exist under national systems, including the rights to interpretation and translation, information and access to a lawyer.

The rules establishing EPPO will also define other rights not yet harmonised by EU legislation, including the rights to remain silent, to be presumed innocent, to be offered legal aid, to present evidence and to hear witnesses.

EPPO is to have a decentralised structure integrated into national judicial systems, with delegated European prosecutors carrying out investigations and prosecutions in their respective member states. Their actions will be coordinated by the European Public Prosecutor to ensure a uniform approach throughout the EU.

EU justice commissioner Viviane Reding said: ‘If we, the EU, don’t protect our federal budget, nobody will do it for us. I call on member states and the European Parliament to rally behind this important project so that the EPPO can assume its functions from 1 January 2015.’

The EC’s proposal needs the support of all EU member states and approval from the European Parliament before it can be adopted.

A European Criminal Bar Association (ECBA) spokesman said that it welcomes the EC's initiative and will 'contribute constructively' to the debate 'in the near future' after careful consideration of the proposal. He said that the ECBA welcomes especially the 'integration of certain procedural safeguards', even those not 'harmonised by EU legislation yet', such as the rights to silence, to legal aid and to hear witnesses.