The UK government yesterday missed the European Commission's deadline to introduce revised laws to protect online shoppers, because it said it needed more time to consider the implications of the controversial directive.

Department of Trade & Industry (DTI) officials said technology advances and the concerns of online retailers had forced it to ask for more time to work on the Distance Selling Directive, which was first discussed in 1998.

The directive gives e-shoppers an automatic right to cancel an order and claim a refund of any money paid - even after goods are dispatched. Unless agreed beforehand, consumers can also claim a refund for goods not dispatched within 30 days. Currently, customers have to return goods before cancelling any contract with a retailer.

However, some businesses have expressed concern that the directive gives too much power to the consumer. When the directive comes into force in European Union (EU) countries, suppliers involved in distance selling, such as web traders, will be required to alter their websites to notify customers of their right to withdraw from a contract and provide shoppers with a cancellation form.

The DTI has rejected claims that it has not done enough to prepare businesses for the impact of the directive. "Business has already had plenty of warning of the provisions in the directive. DTI has issued press notices and conducted a first consultation in 1998 and a further consultation between November 1999 and February 2000," a DTI spokesman told vnunet.com.

"It is precisely because we have sought and received the views of business that we are now engaged now in further work on the UK implementing regulations. The key point is that the consultation threw up new complex questions on which we have been working intensively. The issue about keeping the goods until the consumer gets the money back was in the draft regulations and is one of the points we are actively reviewing," he added.

"Our objective is to find solutions that will balance the basic legal rights of consumers with an environment that will enable business to thrive."

The directive applies to all contracts not conducted face-to-face. As such, this includes orders made by phone, fax or mail - not just those made over the internet.

Some lawyers predict that the directive will cost e-tailers millions in administrative and service costs, and could force smaller firms out of business. Others are sceptical as to how effective the ruling may be anyway. They argue that while the directive protects consumers dealing with European e-tailers, there is no requirement for US vendors to obey it.

However, customers can not yet take e-tailers based in EU countries to court if they fail to comply with the new rules, but can sue the UK government for its tardiness in implementing regulations approved by the European Commission in 1997.