The confrontation between Paris and Brussels over French president Nicolas Sarkozy's anti-Gypsy campaign expanded into a war of words between France and Luxembourg, when Sarkozy told the grand duchy to take in France's unwanted Roma.

Sarkozy was said to have reacted furiously to a verbal broadside from the European commission yesterday. Viviane Reding, the justice commissioner, branded the French policy of deporting Roma a disgrace, appalling, and likened the treatment of the Gypsies to that of the Jews in the second world war. She accused French ministers of duplicity and said she expected disciplinary action against France for breaking EU laws on freedom of movement. Reding is from Luxembourg.

Sarkozy allies emerged from a presidential lunch today to report that the French leader would take the commission to task when he arrives in Brussels for an EU summit tomorrow.

"He says he is only applying European regulations, French laws, and that there is absolutely nothing to criticise France for on the issue," said Bruno Sido, a senator from Sarkozy's UMP party. "But if the Luxembourgers want to take them [the Roma], there would be no problem."

In attacking the French government yesterday, Reding deployed some of the strongest language against a big EU member state heard in years in Brussels. Yesterday fellow commissioners were forced to rally to her side, while making plain they were worried she had gone too far.

But Luxembourg's foreign minister, Jean Asselborn, promptly accused Sarkozy of malevolence, signalling a series of frosty encounters in Brussels today. "She [Reding] was not talking for Luxembourg and did not take instructions from Luxembourg," he told the French news agency AFP. "For Nicolas Sarkozy to amalgamate the commissioner's nationality and Luxembourg is malevolent."

Michel Barnier, Reding's colleague in the commission nominated from France by Sarkozy, criticised the analogies drawn with the second world war. That criticism was echoed by José Manuel Barroso, the commission chief.

"One or other expression used in the heat of the moment may have given rise to misunderstandings. Vice-president Reding did not want to establish any parallelism between what happened in world war two and the present," he said.

But Barroso emphasised his support for Reding. "The prohibition of discrimination based on racial and ethnic origin is one of the EU's fundamental principles. The commission will do what is necessary to ensure the respect of [EU] law."

In recent weeks, on orders from Sarkozy, the French authorities have deported around 1,000 Gypsies, EU citizens mainly from Romania, and demolished around 100 Roma camps.

A leaked document from the French interior ministry last week showed that Roma were being targeted collectively, on ethnic grounds, "as a priority", despite repeated statements from the French government that this was not the case.

Reding's fury was apparently triggered less by the treatment of the Roma families than by the conviction she had been lied to by French ministers.

The commission in Brussels is "analysing the situation" and is to decide in a fortnight whether to press disciplinary action against the French on the grounds that Paris has broken EU laws from 2004 granting Europeans freedom of movement within the EU.

Reding also accused Sarkozy of a populist campaign against the Roma driven by his flagging ratings at home.

France's outspoken Europe minister, Pierre Lellouche, turned up the volume against Brussels.

"My patience is wearing thin," he told French radio. "You don't address yourself like that to a great state such as France, which is the mother of human rights, which is a founding member of the European Union.

"As a French minister, as a French citizen, as the son of someone who fought in the Free French Forces, I cannot let Ms Reding say that the France of 2010, in dealing with the issue of the Roma, is the France of Vichy … a nest egg, an air ticket for the country of origin in the European Union is not the death trains, it's not the gas chambers."

Speaking of the presidential lunch , another UMP senator, Michel Houel, reported Sarkozy as saying that "the European commissioner lives in Luxembourg, which is very close to France. We would be very happy if Luxembourg could also take some Roma."

• This article was amended on 16 September 2010. The original referred to Luxembourg as a principality. This has been corrected.