The Economic and Monetary Affairs Committee of the European Parliament yesterday approved with 40 votes in favour and one against a report drawn up by Labour leader Joseph Muscat on a Commission proposal amending the EU's VAT directive, thus clearing the way for Dr Muscat's resignation as an MEP and his formal entry into the Maltese House of Representatives.

Dr Muscat's report will now move on to the next plenary session of the European Parliament, to be held in Brussels in two weeks time for a final approval by the whole Chamber.

Following the vote, Dr Muscat is expected to hand in his resignation to the president of the European Parliament, Hans Gert Poettering, in order to take up his new role as Leader of the Opposition. Contacted by The Times following yesterday's vote, Dr Muscat said he was satisfied that his report on the proposal for a Council directive amending an EU directive on the common system of value added tax, dealing with insurance and financial services, was given an overwhelming approval and he was looking forward to the plenary vote in two weeks time.

Asked whether he will quit as an MEP at the end of the next European parliament plenary session, Dr Muscat said he is planning to resign as soon as the vote on his report is taken.

The plenary session is scheduled to take place on September 22-25; however the day of the final vote on Dr Muscat's report is not yet scheduled.

Dr Muscat's resignation will kick-start the process of his co-option to Parliament following the resignation of a sitting Labour MP and a bye-election to fill his vacant MEP seat.