A COMPLEX power struggle has broken out between the European Union's institutions over who controls the post-Maastricht common foreign and security policy. It threatens to damage the EU's efforts in Bosnia, central and eastern Europe, South Africa, the Middle East and Russia.

Some parliamentary leaders are threatening to block crucial spending decisions unless they are given more specific oversight on foreign policy spending. But, although ostensibly about cash, the row is actually about the share-out of power, which was left deliberately vague in the Maastricht treaty. 'Behind the money is the question: who's running things,' said an official. 'You've got a lot of turf fighting.'

'Unless this issue is decided, funding is going to be held up and policy will suffer,' said Edward McMillan Scott, MEP for York, a member of the European Parliament's Foreign Affairs Committee. He hopes meetings soon between the Parliament, the European Commission and the Council of Ministers - the member states - will clarify whether MEPs, who already have substantial powers over the EU budget, will also oversee foreign policy spending.

In the Maastricht treaty, foreign policy was supposed to remain separate from most EU affairs, under the direct control of member states, in what was called a separate 'pillar'. But it is proving difficult to interpret what this should mean in practice. 'There is a missing agreement somewhere,' said one official.

Foreign ministers will wrestle with the problem on Monday but are unlikely to solve it. The treaty says that the operational costs of foreign policy can either be borne by member states themselves or the EU. For many issues, such as monitoring the elections in Russia, member states are already turning to the Commission for action and have placed the costs on the EU budget.

Under the EU budget procedures, the Parliament has a central role to play - which is precisely what the treaty's architects wanted to avoid in foreign policy, where they gave it only a consultative role. 'Whatever the Parliament may think and however much the Parliament may regret it, that is the Parliament's role,' said a senior official. There are fears that foreign policy could become hostage to the Parliament, which said last month that it wanted Lord Owen to resign as EU Bosnia negotiator.

The problem has sparked a legal challenge, but advice given to the Parliament and the Council of Ministers on the issue is contradictory, according to documents seen by the Independent. 'There must be oversight of expenditure,' said Mr McMillan Scott. 'There needs to be more openness and transparency about how cash is spent.' The row may rupture a 'gentlemen's agreement' over spending and cause a budget blockage.

The Parliament wants to have a role because it says that otherwise there will be no scrutiny of policy. Mr McMillan Scott complains, for example, that cash previously allocated for assisting democracy in Russia was given indirectly to Rhuslan Khasbulatov, the rogue head of the Russian parliament who headed the insurrection against Boris Yeltsin. If this role is not conceded, the Parliament may hold up spending in other areas, according to Parliament reports.

Britain wants funding handled by member states to minimise the role of the Parliament. But there are divisions of opinion between member states on the issue, and also within them. Indeed, the task of translating the new common foreign and security policy into action has become bedevilled by internal splits, some officials say.

Creating the institutions to handle foreign policy - merging working groups in the EU bureaucracy, for instance - has also caused big problems. Some officials even say that the very idea of 'joint action' - central to the new policy - is difficult to interpret and may cause legal trouble with the EU's Court of Justice.

The problems over financing and control have also sparked a battle between member states and the Commission. The EU's executive bureaucracy fears that, because some foreign policy decisions cover areas where it already has power, such as trade, there is a risk that member state governments will start to 'renationalise' policy and reduce its influence.

The Commission apparently used a different legal interpretation of its powers from both the Council and the Parliament when it acted in Russia, for instance. The treaty says simply that the Commission will be 'fully associated' with foreign policy, which leaves a vaccuum that it is moving swiftly to fill. It wants to ensure that some issues that are now national prerogatives are brought under the common foreign and security policy and is pushing to extend its influence.

But the Commission is internally divided, with a continuing struggle between Sir Leon Brittan, Commissioner for external economic relations, Hans Van Den Broek, Commissioner for external political relations, and Manuel Marin, Commissioner for development, whose portfolios overlap. 'This is really a terrible mess,' said one official.