Nokia announced its intention to lay down 5.7 billion euros to buy the GPS software company, Navteq, way back in October, but now EU authorities may block the deal.

The acquisition would be the largest ever for Nokia but the European Commission has raised concerns over competitions implications.

This is despite the fact that the takeover bid won approval from the US Federal Trade Commission in December.

The EC noted that Navteq is one of only two companies that produce navigable digital maps, which are then used by companies including mobile phone manufacturers.

"The Commission's initial market investigation has indicated that the proposed merger raises serious doubts with regards to ... competition concerns", it said in a statement.

It continues: "The Commission now has until 08 August 2008 to take a final decision on whether the proposed transaction would significantly impede effective competition within the European Economic Area or a significant part of it".

The EC team will focus on assessing whether the transaction would increase the costs of navigable digital maps for other companies or limit their access to these maps, explains Reuters in its report.

In the meantime, the EC continues to look at a similar deal under which TomTom is trying to buy Tele Atlas.

The European authorities have just extended their deadline for a decision on this.