"The energy challenges of the 21st century require a common EU response," Commission President Jose Manuel Barroso, standing against the backdrop of a giant light bulb, told a briefing.

"A common approach articulated with a common voice with our main partners will enable Europe to lead the search for energy solutions."

The green paper proposed a new European energy regulator, revised rules for storing gas and oil stocks, an "action plan" on energy efficiency and a common external energy policy.

The Commission, which has limited authority over energy, hopes the proposals will spur solidarity among EU states, particularly when gas and oil supplies to one or more members are suddenly disrupted.

"They need stocks and they need a reaction mechanism," said Energy Commissioner Andris Piebalgs.

The green paper, which is not a legislative proposal, is to be discussed by EU leaders at a meeting on March 23 and 24.

The paper included a call for a new energy pact with resource-rich Russia, which supplies 25 percent of the EU's gas.

Barroso said Russian President Vladimir Putin had invited him for talks on energy security before the March EU summit.

The Commission said roughly 1 trillion euros ($1.2 trillion) must be invested in Europe over the next 20 years to meet demand and update infrastructure.

Import dependency in the bloc is forecast to rise to 70 percent in the next 20-30 years from 50 percent now if action is not taken, it said.

LOGGERHEADS WITH MEMBER STATES

The goal of unity in the energy sector faces challenges from squabbling among EU members such as France, Spain, Italy and Germany over proposed mergers in the utility sector.

Barroso urged European governments not to shield companies from takeovers on grounds of nationality.

"We should refuse any kind of nationalism of an economic kind, especially in the energy sector in Europe," Barroso said.

The Commission has asked France to explain a government engineered merger of Gaz de France and Suez, which is contested by potential Italian bidder Enel.

It also wants Spain to explain legal moves that may hamper a bid for Endesa by Germany's E.ON and Poland to stop blocking a banking merger already approved by Brussels.

"It's the birth pangs, the growing pains of the single market. That's what's going on and there are bound to be reactions," Barroso said of the backlash against cross-border consolidation.

The volume of mergers and acquisitions in the European energy sector in the first two months of 2006 nearly matched the figure for the whole of 2005, he noted.

EU efforts to encourage more competition in its energy sector have had limited results.

Despite liberalisation over six years ago, huge former monopolies still dominate many markets, keeping prices high and making it hard for newcomers to gain a foothold.

The paper urged a debate on the use of nuclear power - key to energy independence in France but anathema in nations like Austria. Barroso pushed for more low-carbon energy sources and said no subject should be taboo when expanding the bloc's mix.

Member states, reluctant to hand over their sovereignty on energy issues, have resisted efforts to tighten rules on stocks in the past and may be hesitant to endorse a common European energy regulator.

The EU industry lobby welcomed the ideas and British Energy Minister Malcolm Wicks called them "ambitious", but environmentalists said more could be done to promote renewable energy sources and efficiency measures.