The Belgian Polished Diamond Dealers Association said that it had asked European Union regulators to outlaw De Beers's distribution system, known as "Supplier of Choice."

"De Beers has misled the European Commission, has abused its dominant position and has artificially limited the availability of diamonds on the market," the group said on Friday.

De Beers controls some 70% of the world's rough diamond supplies, which are sold to 120 manufacturers and dealers at periodic sales known as "sights".

No availability

The trade group claimed De Beers is using obscure criteria to select traders which, in effect, denied them access to adequate quantities of diamonds.

"Liquidity of diamonds in the market has disappeared," the association said.

De Beers defended its distribution system and said it helped promote competition in the market.

EU regulators closed an investigation into the De Beers system in 2003, saying it would keep a close watch on the market to make sure traders were able to receive enough rough diamonds.

According to the Antwerp World Diamond Centre, which represents the city's diamond industry, 80% of all rough diamonds are handled in Antwerp, Belgium.