South Korea wants the World Trade Organization to investigate the European Union's provision of subsidies to the economic bloc's ailing shipbuilding industry.

The EU earlier blocked the first request for a panel, but South Korea has decided to resubmit its demand at the next WTO meeting in a month, leading to the launch of a formal dispute settlement panel.

WTO regulations stipulate that a panel must be automatically set up if any member nation demands such a request two consecutive times, and must subsequently investigate the case within six months by forming a dispute settlement panel.

Both sides held consultations in October and November last year but have failed to settle the dispute amicably.

South Korea complains that the EU's protective measures, including the provision of export credits to its shipbuilders, along with the so-called Temporary Defence Mechanism, are keeping Korean builders from selling vessels in the European market.

Brussels believes the subsidies are justified, accusing South Korea of reneging on a 2000 agreement between the two sides by bank-rolling its shipbuilders through its export-import bank.

South Korea has denied the charges.