The European Commission this afternoon defended Giovanni Kessler, director general of the anti-fraud agency OLAF,  saying that nothing in a supervisory report on the agency's work indicated grounds to justify calls for his resignation.

Dr Kessler has come under strong criticism over his agency's handling of the investigation which led to John Dalli's resignation from the European Commission.

In its statement, the Commission said it had noted the many positive comments in the report on the work of OLAF and the progress made following its recent reorganisation.

"With regard to calls through the media for the removal of the Director General of OLAF, the Commission recalls the independence of OLAF and its DG in carrying out investigations. It considers that nothing in the report would indicate grounds for such action. The Commission notes the willingness of the DG of OLAF and the Supervisory Committee to deepen the mechanisms that provide for a fruitful exchange and smooth cooperation in their respective areas of responsibility."

The commission said it would discuss the report with the Supervisory Committee, the Director General of OLAF, the Council and the European Parliament Budgetary Control Committee.