A European Union arms embargo clamped on China in 1989 following the Tiananmen Square crackdown could be lifted in early 2011, Brussels sources told Thursday's edition of France's Le Figaro daily.
The lifting of the embargo on all lethal weapons "could happen very quickly," a source close to EU foreign policy chief Catherine Ashton told the paper.
It said that the embargo was considered a slap in the face for the world's second largest economic bloc as well as militarily ineffective by the EU as China increasingly builds its own weapons.
A confidential report presented to the last European Union summit that ended on December 17 described the embargo as "a major obstacle" to Europe-China security and foreign policy cooperation.
As a result "the EU should draw the practical conclusions and go ahead," the report said.
Europe was divided on the issue when it was discussed at a meeting of the EU's 27 foreign ministers in September, with some mooting the idea of a conditional lifting of the embargo.
Conditions included improved ties with Taiwan, an amnesty for arrests linked to the Tiananmen crackdown, and a calendar for the ratification of the convention on civil and political rights.
The Figaro said that the Netherlands, Britain and, to a lesser extent, Germany, had all lowered their opposition to lifting the embargo.
Chinese troops and tanks ended weeks of pro-democracy protests in Beijing central Tiananmen Square on June 4, 1989, killing hundreds if not thousands of demonstrators.