The European Commission has shelved its plan to overhaul copyright fees, after intense lobbying from France and from groups representing artists and authors.

The Commission was planning to replace the patchwork of national rules with a Europe-wide code designed to better suit the digital age. It decision to drop the plan has come as a surprise.

Presently most countries impose copyright levies on a wide range of products, from photocopiers to mobile phones, and including recordable formats such as CD-Rs, blank cassettes and even paper. The size of levies varies widely from country to country. Only the UK, Ireland and Luxembourg do not impose any such levies.

Copyright levies are supposed to compensate artists and authors who don’t receive any payment when their copyrighted music, documents or pictures are duplicated by consumers.

The Commission wanted to harmonise the rules and scrap levies on most hardware. Its aim was to reduce the fees, which in some cases increase the price of goods dramatically.

For example, in Spain consumers have to pay almost €300 (£200) in levies when they buy an 80GB MP3 player; in Austria the equivalent charge is just €8, according to the Copyright Levies Reform Alliance (CLRA), a coalition of businesses dedicated to harmonising and lowering copyright fees in Europe.

The Commission said it was abandoning the rule change for now. It had planned to publish a proposal before the end of this year. "More reflection is needed on this complex issue," said an EC spokeswoman. She wouldn’t give a new timetable for the legal proposal.

She acknowledged that the French prime minister Dominique de Villepin had written to the Commission earlier this month, urging it to drop the plan but she insisted that the Commission will decide for itself when the proposal will be launched.

The Commission has been planning to harmonise copyright levies since 2000. Since then the case for scrapping most levies has grown stronger as digital rights management software has become commonplace.

The Commission’s climbdown sparked an angry reaction from the companies and industry groups pushing for a change to the system. "European industry is deeply disturbed by the European Commission’s apparent about-face on the planned reform of copyright levies," said a spokesman for the CLRA.

"With this decision, it is clear to industry that the Commission has abandoned any serious efforts to establish transparency, efficiency and fairness in the way these levies are set, collected and distributed," he added, warning that without the revamp of copyright levies, several large European companies now intend to file official complaints with the Commission that will likely result in a wave of infringement procedures against certain member states.

"The reform of copyright levies would then move from the European executive to the European Court of Justice," CLRA said.