Compensation

Gyurcsany said the European Union should invest at least $395m in the $10.4bn project to help it succeed.

"The European Union should finance at least the beginning of the project to the tune of 200m to 300m euros, with credit and money from its own budget," he said.

European officials expressed support for the pipeline but stopped short of offering direct financing for the project.

Andris Piebalgs, the European energy commissioner, said that although the EU could provide loans and guarantees, it should not consider providing capital financing.

The pipeline could transport up to 31bn cubic metres of gas each year to Europe [EPA]
He said: "I believe that we can facilitate getting loans in such a difficult situation of the credit crunch.

"But not go beyond it because then it doesn't make sense, because then it's not anymore the consortium's project but a public private partnership and I'm not ready at this stage to even consider such a type of option."

The European bank for reconstruction and development said it was ready to consider giving a financial contribution to the project.

Gyurcsany also told EU members hit by the gas dispute that they should seek compensation for the damage caused by the halt in energy supplies.

"Now that the gas crisis is over, the question must be asked: what will happen to the damage we suffered?," he said.

"I think the appropriate thing is that the Hungarian government examines the possibility of filing a claim for damages, and... that the claims of individual countries are summarised by the EU which then takes joint action."

Turkey dispute

Earlier in the week, Bernadett Budai, a Hungarian government spokeswoman, said the Russia-Ukrainian dispute proved the importance of creating the new pipeline.

"There isn't a PR campaign in the world that could have given the Nabucco as much attention as the Russian-Ukrainian dispute did," she said.

"This is the best opportunity in years to make progress."

Ministers from Austria, Azerbaijan, Bulgaria, Egypt, Georgia, Germany, Iraq, Romania, Turkmenistan and Turkey are attending the talks in Hungary's capital.

Talks are also expected to focus on securing enough gas supplies for the pipeline, and to settle a row with Turkey over the amount of gas it keeps.

Turkey's partners want it to serve as a transit country that would not use any of the gas pumped through it, but Ankara has demanded it keeps a net 15 per cent of the energy supply.