Competition authorities in Brussels are heading for a showdown with national regulators over the possible blocking of more than €100bn ($128bn) worth of mergers, putting up to €500m of fees from the transactions in jeopardy.

Three of Europe's biggest pending takeovers could be derailed after a stand-off between governments in France, Italy and Spain and the European Commission. German utility E.On's €44.5bn bid for Spain's Endesa and the €22bn merger of Spanish construction company Abertis with Italy's Autostrade have been blocked by national competition authorities. Gaz de France's planned €34.5bn merger with Suez has been delayed by political wrangling amid claims being investigated by the EC that the French government is supporting an alliance between French and Italian airlines in exchange for Italian power companies staying out of the French market. The EC could take legal action against Spain and Italy if it decides the governments are abusing Article 21 of the European merger regulations. This states the national regulator can intervene to block a merger if there is legitimate national concern regarding security. A lawyer said: "Both governments are clearly abusing this in order to protect national champions." The dispute will come to a head within a few weeks. Another competition lawyer said the dispute between Brussels and competition authorities in Europe was the most severe since 2001, when Portugal tried to keep foreign companies out of its market. The impasse is affecting revenues at investment banks, which receive most of their fees once a transaction completes. A banker close to Endesa said the company had not paid its advisers, despite some of them being hired last September to fend off a rival bid from Gas Natural. According to data provider Dealogic, the estimated fee pool from the three deals accounts for about 14% of total M&A fees owed on pending deals. The EC is considering its next move after receiving letters from the Spanish energy commission, the CNE, defending its decision to place 19 conditions on E.On's proposed acquisition of Endesa, despite the EC approving the merger. Spain is coming under pressure from the EC over the legality of the conditions. The EC has the power to overrule the two governments. Johan Ysewyn, a partner at law firm Linklaters in Brussels, said: "The EC can bring a case before the European courts and impose fines on the government but that will take two to three years. Alternatively, it has the nuclear option – this involves imposing interim measures on the Spanish government which make it unlawful to enforce the conditions on E.On on the grounds it is against the free movement of capital and competition." The EC is considering what action to take against the Italian government, which has blocked the Abertis-Autostrade merger by invoking a law preventing the country's motorways being owned by a construction company. The proposed merger of Gaz de France and Suez, seen by many as a protectionist ploy by the French government to stave off interest in Suez from Italy's Enel, could also be investigated. Competition commissioner Neelie Kroes is concerned the merger could harm competition in the French and Belgian energy markets and has until October 25 to make a decision on whether the deal can proceed.