European shares ended higher yesterday, helped by Anglo American's plans to return up to $1 billion to shareholders and energy stocks lifted by firmer oil prices, but weak utilities capped market gains.

Utilities led sectoral losers with Scottish power off 1.6 per cent on talk that the $9.4 billion sale of its PacifiCorp unit could be delayed by US state regulators.

Other sector names such as Suez fell foul of new interest-rate worries as fears new Federal Reserve Chairman-designate Ben Bernanke might be a bit softer on fighting inflation than Alan Greenspan pushed US long-bond yields to fresh six-month highs.

But there was strength elsewhere, with Anglo American shares surging six per cent after the mining giant said it would return up to $1 billion to investors next year as it culls several subsidies to focus on core mining units.

"The statement reads very well. They're confident about the business and they're giving cash back to investors which is always a popular move," a dealer says.

By 1545 GMT, the pan-European FTSEurofirst 300 index was 0.4 per cent stronger at 1,187.1 points, about four per cent below a 41-month high of 1,242.2 points struck this month, but still up 14 per cent so far this year.