The European Commission has agreed to mediate the conflict between Panamanian authorities and the consortium of three European companies, including Spain's Sacyr, over the project to expand the Panama Canal, EC Vice President Antonio Tajani told Efe on Sunday.

Tajani said in a telephone interview with Efe that on Sunday he received a request from the consortium to "try to mediate in the solution to the problem."

Sacyr, along with Italian firm Impregilo and Belgium's Jan de Nul, are at odds with the Panamanian authorities about getting paid for cost overruns amounting to $1.6 billion that have arisen on the project to build a third set of locks for the waterway.

"The most urgent thing," Tajani said, is "to gain time" since on Monday the ultimatum the firms issued - stating that they would halt work on the project if their demands were not met - expires.

"I'm very familiar with the problem of cost overruns on big projects. Unfortunately, it's a phenomenon that also occurs within the (European Union). I understand the position of the European companies but I also understand the position of the Panamanian authorities," the VP, who is also the EC's industry chief, said.

"A rupture of the dialogue on a big project that is very far along is not in anyone's interest," Tajani added.

He told Efe that the priority is to move the ultimatum back and then see what can be done although he warned that "it won't be easy."

He also said that in the coming hours he would be in contact with the governments of the three firms' countries, the European Investment Bank and the Panamanian authorities.

"Starting now, I ask the parties for an effort to move toward a common position. It serves little purpose to repeat their own positions without advancing toward the point of encounter," Tajani warned.

But he also stated that "I'm award of the difficulty of the problem to be resolved but I'm personally committing myself to try and seek a satisfactory solution for all." EFE