The British Home Secretary, Charles Clarke, has confirmed that EU Ministers have failed to reach agreement on new rules governing how long companies should retain information about mobile phone calls and the use of the internet.

Despite optimism at the beginning of the day that a deal would be struck, Mr Clarke later acknowledged that retention of telecoms data was a tricky political question.

The proposals dominated discussions at a summit of EU home affairs ministers, including the Minister for Justice, Michael McDowell, which is taking place in the north-east of England.

Mr Clarke chaired the meeting as part of Britian's rotating presidency of the EU.

The plans have been subjected to a barrage of criticism from the mobile phone industry.

Some EU ministers fear the proposals would infringe civil liberties, while some telecommunications companies argue it would be too expensive for them to store such huge amounts of data.