The European Union is to impose anti-dumping levies on imports of Chinese solar panels.

EU trade commissioner Karel de Gucht said the 27-country bloc will impose a tariff of about 12% immediately, increasing to 47% in August.

The tariffs will become permanent in six months if the EU Commission, the bloc's executive arm, and China do not manage to negotiate a settlement by then.

Mr de Gucht says "the ball is now in China's court".

China is the world's largest producer of solar panels and is accused by the EU of selling them below cost to corner the market. Its exports of solar panels to Europe totalled 21 billion euros (£18 billion) in 2011.

The trade row between the EU and China, the world's number one and number three economies, is the biggest anti-dumping case in history by sales volume, according to EU officials.

The commission is likely to press Beijing to sell its solar panels at a higher price. If a settlement cannot be reached, Brussels will propose making the anti-dumping tariffs permanent, a move that would require approval by a majority of the EU's 27 member states.

The global solar panel market is suffering from overcapacity, which has led to stiff competition that has forced several European manufacturers out of business.

Several EU nations, including heavyweight Germany, had spoken out against imposing special duties and urged the commission to reach a settlement with China.

Germany has the bloc's biggest solar industry but Berlin fears imposing special duties could provoke Chinese retaliation on imports of European goods which, in turn, would harm German exporters.

China had rejected the EU's price-dumping allegations, but the problem is not new for Beijing. The US last year imposed punitive tariffs on solar panel imports after finding that China's government was subsidising companies that were flooding the US market.