France has been blamed by the United States, a major producer of genetically- modified soybean and corn, for delaying EU-wide approval of new U.S. crop strains. France has said it will await the outcome of the June 20-21 ``citizen's conference'' before deciding whether to approve gene crops.

If France changed its laws on gene crops in a way that made them incompatible with EU-level rules, the Commission- -- the EU's executive arm -- would have no choice but to take legal action against Paris, the source told Reuters.

If, on the other hand, the French authorities decided simply to withdraw requests to Brussels for approval for individual gene-crops -- made by the previous French government -- the Commission would take no action.

But that withdrawal would prevent any other country in the 15-nation EU from importing, planting or marketing those varieties for the time being, the source said.

Under the EU's convoluted rules, the use of gene crops is only legal once a government in the bloc has requested and obtained authorisation from the other 14 EU states and the Commission, and has then given the crop a formal green light.

Paris sought, and received approval from the EU this year, for two varieties of maize produced by U.S. pharmaceutical giant Monsanto (MTC.N) and German agrochemical company AgrEvo (HOEG.F) (SCHG.F). But it has suspended a decision on final approval until after the public debate.

The French government has also delayed a decision on whether to import a variety of rapeseed produced by AgrEvo, approved by the EU in 1996 on a request from Britain.

A French diplomat told Reuters she expected the government to endorse the maize varieties, as there appeared to be no risk that the modified gene could be transferred to other crops.

"That would be the only coherent approach," the diplomat said, adding that France had endorsed the use of a third gene-maize, produced by Swiss pharmaceutical group Novartis (NOVZn.S) earlier this year, before halting all further gene crop decisions.

But Paris was opposed to gene-changed rape because scientific research had shown there was indeed a risk the altered gene could migrate to other plant species, she said.

If France did decide not to go ahead with approval for Monsanto and AgrEvo maize, no other country in the bloc would be allowed to use them unless another government started the laborious authorisation procedure again, the EU source said.

If Paris decided actively to bloc the AgrEvo rape, it would have to satisfy Brussels that the crop did pose a genuine risk to health or the environment. Otherwise it would be in breach of the bloc's free trade rules and vulnerable to court action.

Luxembourg and Austria, who slapped national bans on the Novartis maize on health and environmental grounds, expect to be told by Brussels in September that their ban must be repealed.

An Austrian diplomat told Reuters on Wednesday Vienna would obey that order but then take the Commission to court on the ground it had not properly considered the evidence of the risks.

But EU sources said there was no way Vienna could win such a court challenge and said they suspected this was simply an attempt by the Austrian government, which faces elections early next year, to drop the controversial ban without causing uproar among a public ferociously opposed to gene crops.

"I expect the court case will be quietly dropped after the elections," one source said.