Brussels - The Social Democrat bloc in the European parliament called for tougher labour laws Friday following a ruling by the European Court of Justice that forbids the setting of agreed minimum wages in public building projects.

The court's ruling on Thursday was in the case of a Polish construction subcontractor working in Germany that will now be allowed to pay its workers lass than half the agreed wage for German builders.

The decision was based on the grounds of freedom of movement and the provision of services across the European Union. It applies only to public projects.

The ruling indicated "that we urgently need an improvement in the social laws for Europe," bloc leader Martin Schulz said.

The Greens in the European Parliament also expressed disappointment over the ruling, and one left-wing politician said it would lead to "social dumping."

Meanwhile, liberal and conservative lawmakers praised the ruling for strengthening competition.

On hearing of the decision Thursday, British trade unionists warned it could disrupt the completion of the facilities for the 2012 London Olympics.

"This decision effectively means that foreign companies working here in the UK, or in any other European country, can flout domestic laws and collective agreements with regard to pay," Derek Simpson, joint general secretary of Unite trade union, said.

"This is a recipe for disaster and, if applied here in the UK, will cause massive industrial unrest and threaten the delivery of major infrastructure projects including the Olympics site." (dpa)