The European Parliament has approved plans to cap mobile roaming costs abroad.

Although the EU regulation, which was primarily agreed by 27 MEPs last week, must still be approved by the European Commission and member governments of the 27-nation bloc, this is only considered as a formality.

The new move has been praised by Telecoms Commissioner Viviane Reding who has said the approval was “a good day for consumers and business travellers in the EU."

"From this summer, mobile phone customers will start benefiting from substantially reduced roaming charges when travelling from one EU country to another. Europe's internal market will finally become truly borderless, even for mobile phone bills," she added.

Britons using their mobile phones in Europe will have their calls capped to €0.49 (34p) a minute this summer – a price that will drop to €0.46 (32p) in 2008 and then to €0.43 (30p) in 2009.

The cost of receiving calls will also be capped at €0.24 (17p) per minute this July and then be cut to €0.19 (13p) over the following two years.

However, not everyone is pleased about the agreement.

Last week the GSM Association claimed that the prices for the caps were so low that they would not allow for competition for roaming charges across each mobile provider.

The new approval saw it echo the warning, claiming that price caps would mean that smaller firms would find it difficult to compete in the future.

The pricing which is due to begin in late July, early August this year will only apply to phone calls - texting and data roaming are not currently covered under this law.