The criticism, led by Burckhard Bergmann, chief executive officer of E.ON Ruhrgas, amounted to one of the most stinging attacks leveled against Neelie Kroes, the European Union competition commissioner. Kroes has consistently taken a tough stance, particularly against Germany and France, for their refusal to "unbundle" the ownership of energy producers from the supply business.
Kroes argues that breaking up the giants would promote competition and lower prices across the Continent.
But Bergmann took issue with that, insisting that "there was no empirical evidence that unbundling would lead to lower network charges or that it enhances investment cross-border competition."
Speaking at the European Autumn Gas Conference, he added: "The European Commission is completely inconsistent. It says it wants to introduce unbundling and reduce regulation. But what it is doing is unbundling and increasing regulation."
The commission's proposals, detailed last month, envisage an energy company selling its network or supply business to a third party. Alternatively, it could split the integrated company into separate shares for the distribution network on the one hand and the supply and production business on the other, provided that separation is achieved.
Another option is to establish Independent System Operators, in which supply companies would continue to own the networks but all activities related to the network, including investments, would be transferred to an independent operator, which would be subjected to detailed regulation and supervision.
But Bergmann said such measures "would deprive the companies of all ownership rights. They are not justified."
The German and French energy leaders, which over decades have established tightly organized, vertically integrated structures, have so far fended off the commission's attempts - with the backing of their national governments.
Angela Merkel, the German chancellor, has made it clear over the past few months that she would not support any unbundling of the energy sector.
Analysts have said her defensive position reflects broader difficulties within her coalition government of conservatives and Social Democrats, where the momentum for change and commitment to more competition and transparency has almost come to a standstill.
Jens Baganz, state secretary at the economy and energy ministry in North Rhine-Westphalia, where many of the big German energy companies are based, said his government was "not convinced that the commission's focus on unbundling paves the way for greater competition."
Addressing the conference, Baganz, who is a member of Merkel's conservative Christian Democratic Union party, asked "what would happen to investments" if the owners were forced to sell their networks.
Kroes, in a speech last week, rejected claims by the industry that investments would dry up. She said investments have increased in the three European Union countries that have already unbundled - Britain, the Netherlands and Spain.
Baganz went on to criticize the commission's plans for breaking up the large energy companies, claiming the commission was discriminating against private companies, which had to be broken up, but not touching state companies.
Kroes said her measures would not lead to the expropriation of property, nor were they discriminatory. In the case of state-owned companies, she insisted that network operators and supply companies would be entirely separate.
Baganz also criticized the commission "for focusing too much on regulating the internal market instead of looking at the long-term supply of gas for Europe."
The commission has been looking at ways to diversify the bloc's energy supplies and increase energy security so as to reduce Europe's dependence on Russia. But European Union governments have resisted pooling responsibility, seeing the issue as a matter of national security.
This became more critical after January 2006, when Gazprom, Russia's state-owned energy giant, stopped sending natural gas to Ukraine, a major transit country for Russian gas exports, because of a price dispute. This led to some shortages in Western and Eastern Europe.
More than 60 percent of oil exports from Russia go to the European Union , representing over a quarter of the European Union's oil consumption. And 50 percent of Russian natural gas exports are earmarked for the 27-member bloc, making up a quarter of the European Union's total gas consumption.
Baganz, however, praised E.ON Ruhrgas for diversifying its energy supplies by developing liquefied natural gas and building the Nord Stream pipeline. This German-Russian underwater pipeline will run under the Baltic Sea and reduce Russia's dependence on Ukraine as a major transit country.
Baganz has close ties to German energy companies; he was a member of the supervisory board of RWE, another large German energy company, and former chief of personnel at VEBA, which is now E.ON Ruhrgas.
Stefan Judisch, chief executive officer of RWE Gas Midstream, criticized European Union officials and regulators for not understanding the markets.
