The Federation of Small Businesses (FSB) has criticised the EU's proposal to alter rules governing contractual arrangements.

If successfully implemented, the proposal known as Rome I, would require online businesses to comply with consumer protection legislation in every member state within the union.

British firms would be affected if they sell to countries that have opted in to this area of European legislation.

"This proposal would send shopping back into the dark ages," said Tina Sommer, EU affairs spokesman for the FSB.

"[Businesses] would not be able to afford specialised legal advice to understand consumer laws in every EU member state," she added.

In addition to the damage caused by smaller businesses through the costs of legal advice, the FSB believes that many businesses would be forced to remove product and price information from their websites.

The FSB is a UK-based lobby and benefits organisation for Britain's small business sector.