The European Union is damaging relations with China by holding up talks over a trade practices agreement, Lord Mandelson, the UK business secretary, said on Wednesday.

Lord Mandelson, who served as EU trade commissioner between 2004-08, said talks over awarding “market economy status” to China were being stalled as a result of political pressure from some EU member states. During a visit to China, Lord Mandelson told the Financial Times that the talks “should not be held back politically by prejudice or special trade interests in Europe”.