BRUSSELS, Belgium — The European Union (EU) said it has driven a major new genome sequencing project to a point where there is now a real prospect of unraveling the entire sequence of the Arabidopsis thaliana within three years.

Over the last four years the EU has ploughed more than $16 million into the project to investigate what is regarded as a model for understanding fundamental genetic aspects of plants. The EU said the group it has backed under the biotechnology research support program is aiming to complete the genome sequence by the end of 2000.

The sequencing began in 1994 with 10 European countries involved, and was coordinated by a U.K. institution, the John Innes Centre. In 1996 three U.S. groups, funded by the National Science Foundation and a Japanese laboratory, joined the EU team. The team published initial results in Nature at the end of January.

The EU says the project provides a unique source of knowledge about the plant kingdom and opens the way for biotechnology applications. The EU is highlighting the discovery that the function of nearly half the genes are not yet known.

One of the key milestones just reported is the analysis of a 1.9 megabase pair region on chromosome 4 of Arabidopsis. Although this sequence represents only 1.5 percent of the total genome, it provides the first indication of a large-scale genome organization at the most detailed level.

This region, which is the largest contiguous region of any genome to be sequenced, contains 389 predicted genes, and this high gene density is found in all other sequenced regions, indicating that Arabidopsis may have approximately 21,000 genes (3.5 times more than in yeast and approximately 100 times less than in humans).

Of the 389 genes described, 54 percent have significant similarity to genes of known function, and a high proportion of the predicted genes are likely to be involved in disease resistance, defense and stress responses, and have significant potential applications in plant biotechnology, the EU said.

The 46 percent of predicted genes with no significant similarities to genes of known function, referred to as "orphan genes," require systematic experimentation to define their functions, which opens new opportunities for investigation. The EU also is stressing that the Arabidopsis genome project also is a novel model for international cooperation in science.

Arabidopsis is a small, herbaceous member of the brassica family. It has became a favorite species for the study of fundamental aspects of plant development, metabolism and interactions with the environment, with a view to applications in crop plant biotechnology. Its relatively small genome size, its compact growth and the ease with which it can be genetically manipulated make it particularly suitable for genome work.

In other EU-funded programs, the organization has awarded 24 training grants for biotechnology, following evaluation of the 47 applications submitted by Nov. 1, 1997. This brings the total number of grants since March 1995 to 298 (mostly for 24-month projects), worth a total of more than $24 million.

The EU's Fifth Framework Programme for Research and Development, designed to fund biotechnology and other science projects between 1998 and 2002, has run into problems because of differences of opinion among the 15 member states over its budget.

The expectation was that the five-year program would receive around $20 billion. But the current dispute is likely to prevent European Union research ministers from reaching a common position at the EU research council meeting this week.