A row over moves by Mexico to place restrictions on new renewable energy projects escalated into a full-scale diplomatic incident as the EU and Canada lodged protests over latest measures by the government of President André Manuel Lopez Obrador (AMLO).

New rules published on Friday confirm plans to give state agencies more control over wind and solar projects, said Mexican business organisation CEE, which threatened legal action as it roundly condemned the measures as an attack on private enterprise that would imperil foreign investment.