The most ambitious attempt yet to create a pan-European market for the investment industry is in danger of turning into a "nightmare", amid signs that European Union member states are departing from the original idea of a single rulebook for the entire economic bloc.

The warning - by Charlie McCreevy, the EU internal market commissioner - will add to widespread fears that a landmark EU law known as the markets in financial instruments directive (Mifid) might fall short of achieving its original ambitions.