The Commission has estimated the annual cost of the law to industry would be around 1.5 billion euros ($1.33 billion).

"We will make the polluter pay," Environment Commissioner Margot Wallstrom told reporters, saying the proposal was one of the most important environmental measures to come out of Brussels in years.

But environmentalists, who have been campaigning for decades to get a law that guarantees flora and fauna the same protection from industrial incidents that people and property already enjoy under existing civil liability laws, slammed the plan.

A coalition of all the big green groups met Wallstrom this week to call on her not to push it through at Wednesday's weekly meeting of EU commissioners, saying it was riddled with loopholes that made it worthless.

EASY DEFENCE FOR FIRMS

"This would not prevent disasters happening and would not make people that cause those disasters pay," Roberto Ferrigno, policy director at the European Environmental Bureau (EEB) said.

The EEB, and other groups including Greenpeace and Worldwide Fund for Nature (WWF), said Wallstrom had given in to all the main demands of industry which fears the new law would leave it open to endless legal suits from green groups.

Their main concern is that if firms can prove they complied with environmental permits they could not be held liable.

The proposal would only protect nature in defined zones of special environmental interest and green groups could not bring cases against companies themselves - both fatal weaknesses in the proposal, Ferrigno said.

Wallstrom insisted the law would force companies to clean up after illegal chemical spills or environmental accidents.

Under her proposal, government authorities would compel companies to clean up environmental damage, or do the clean-up themselves and then pursue the culprits for the costs.

Notorious disasters like the 1976 Italian Seveso chemical plant explosion or the mining waste spill that ravaged Spain's Donana national park in 1998, would have been prevented or punished by the law had it been in place then, Wallstrom said.

The law would not make it compulsory for firms to insure against the increased environmental risks, but national governments would be allowed to impose this on their companies.

Financial damages would be based on the cost of restoring the environment to health. The full board of commissioners will have to decide whether there should be a ceiling on damages or whether liability should be unlimited.