Prague/Brussels  - The Czech Republic, current holder of the European Union's rotating presidency, called for the emergency EU summit on Sunday to reject protectionism as France vowed that a plan to support the auto industry would not break EU rules.

"We do not want any new dividing lines; we do not want a Europe divided along a North-South or an East-West line; pursuing a beggar-thy-neighbour policy is unacceptable. That the internal market remains united is of vital importance," Czech Prime Minister Mirek Topolanek said in a statement on Saturday.

On Sunday Topolanek is set to host in Brussels an emergency EU summit dedicated to the ongoing economic crisis.

Ahead of the summit, tensions had run high over a French plan to support the domestic car industry which included demands that car makers give priority treatment to French factories and suppliers.

The Czech Republic, which has become a major production centre for the automotive industry and has seen sizeable investments from French car firms, attacked those demands as protectionist.

Soon after the row broke out, the Czechs called the emergency summit, saying that it should focus on rejecting protectionism. French and German leaders said that the focus should be on thawing out frozen credit markets.

But on Saturday, officials in the European Commission, the EU's executive, said that France had "undertaken not to implement aid measures to the automotive sector that would contravene the principles of the internal market."

"In particular, the loan agreements with manufacturers would not contain any condition regarding either the location of their activities or a preference for France-based suppliers," a commission statement said.

Officials said that the development would ease the atmosphere at the summit.

EU diplomats said that the summit was likely to end in a statement stressing the importance of keeping to the rules of the EU's common market and calling on international trading partners to make similar commitments.

It would also call for further measures to encourage banks to start lending again. (dpa)