Lord Mandelson, business secretary, warned on Sunday that Europe risks learning the wrong lessons from the financial crisis and posing a danger to the single market and the City of London.

Lord Mandelson, Britain’s former EU commissioner, fears that some in Europe are using the crisis to call for weaker competition rules and a clampdown on parts of the UK’s financial services industry.

He will present a paper on raising EU competitiveness to Nicolas Sarkozy, French president, at an Anglo-French summit on Monday in the Alpine resort of Evian in France.

In an interview with the Financial Times, Lord Mandelson said that while he agreed with the temporary loosening of EU competition rules to help struggling companies through the recession, he feared the changes could become permanent.

“There is no justification for having the rules permanently weakened,” he said. “That will create a threat to the single market.”

France has been a long-standing critic of what it sees as Brussels’ over-zealous application of competition rules and is also a leading supporter of tougher rules to govern hedge funds and private equity funds.

Lord Mandelson said Britain was supporting new, EU-level supervisory and regulatory powers for the financial services sector, but that it now expected a further degree of support from critics of “Anglo-Saxon capitalism”.

“I hope that the quid pro quo is understood and that people understand the need for balance,” he said. “We accept the need for reform but we will stand up for and defend important parts of the City of London.”

Lord Mandelson, who has become Britain’s de facto deputy prime minister since returning from Brussels to Westminster last October, also criticises the European parliament for delaying the confirmation of José Manuel Barroso for a second term as European Commission president.

“The European parliament is entitled to assert its legitimate role but, at the at the expense of the member states’ views or Europe’s, needs to be strongly led at what remains a very dangerous time economically and financially,” he said.

Mr Barroso was endorsed for a second term by EU leaders at a summit in Brussels last June, but awaits confirmation by MEPs.

At that summit he displayed his mastery of playing to various camps. While French journalists were briefed that the Commission president had set out a “Sarkoiste” vision for his next five years, Mr Barroso told the British he had been influenced by Lord Mandelson’s thinking on competitiveness.

Meanwhile, Gordon Brown, prime minister, will say on Monday in Evian that there “is no room for complacency” about the current state of the world economy, warning of rising oil prices, the continued ill-health of some banks and falling world trade.

“There are many voices saying that the worst of the downturn is over,” he will say. “But there is no room for complacency.”