A major shake-up in car sales was demanded by the European commission today, which could bring down prices for UK car buyers.

The new proposals would break car manufacturers' stranglehold on national car markets and could lead to supermarket-style showrooms throughout the EU.

The commission insisted this afternoon its plans were "proposals for consultation", with car makers and distributors now invited to submit their views before the changes are considered by EU governments.

Today's announcement follows years of controversy over exclusive distribution and marketing rights which allow car manufacturers to bypass normal EU rules on free competition.

But, after years of complaints from consumers about high car prices and obstacles preventing them buying cars in the cheapest EU market, the commission has decided not to renew the so-called "block exemption" for car manufacturers, which expires September this year.

Regular car price surveys conducted by the commission have shown that retail prices for identical models in different European markets can vary by more than 15% - usually with the British car price the highest in the EU.

Months of consultation now follow as car makers attempt to preserve as much of their exclusive dealership and distribution rights as they can.

But consumer organisations are pressing the commission to open the market as much as possible to give customers the best car bargains wherever they choose to shop.

EU competition commissioner Mario Monti, unveiling the proposals to Euro MPs in Strasbourg, said the aim was to ease the current "serious restrictions" on European consumer choice in car buying.

He said car makers would still be able to operate exclusive distribution networks in European cities, with exclusive showrooms, but distributors would, if the plans go through, be allowed to buy cars from other manufacturers and set up sales points wherever they choose in the EU.

They would also have more flexibility in offering after-sales service, allowing buyers to go to independent authorised servicing and repair networks separate from the car makers' in-house facilities.

Mr Monti gave the example of a Volkswagen dealer in Amsterdam who would in future be free to open a showroom in, for example, Britain and sell Volkswagen Golf models in the UK at the Dutch retail price, which is currently 23% lower than the British price.

"This would create the right market conditions to reduce the considerable price differences that exist between cars in different EU markets at the moment," said the commissioner.

Mr Monti said independent car suppliers such as Virgin Cars would also find it easier in future to find the lowest possible car prices for its customers.

On supermarket-style showrooms, Mr Monti said the commission's plan was for "multi-brand" sale centres in which different cars could be sold but with the makes allocated to different parts of the same showroom to avoid customer confusion - similar to the arrangements at the new car shows which are held annually around Europe.

Traditional supermarkets, too, would be free to buy cars in the cheapest European markets and offer them for sale to their customers - another mechanism which would help reduce price differentials.

Commission President Romano Prodi said it was a bold initiative which "puts the European consumer firmly in the driving seat".

The commission proposal is now being submitted to a special committee on restrictive practices, which includes representatives of all EU countries.

A wider consultation period will follow, with the new rules due in force on October 1 this year.