Kyoto poses energy-rich Canada several tough political and economic challenges and some suspect the showdown will help push Ottawa down the same path taken by the United States, which abandoned the treaty last year and immediately became an international pariah.

"Canada does not want to sign up to Kyoto but it also wants to avoid the image problems which that would cause," said one senior EU delegate to a meeting of environment ministers which ended on the weekend in the Rocky Mountain resort town of Banff.

Canada's most obvious quandary is that it has little chance of fulfilling its Kyoto commitment to cut emissions of the greenhouse gases blamed for global warming by 6 percent from 1990 levels by 2010. Latest estimates show that Canada's emissions actually grew by 20 percent from 1990 to 2000.

Last year Ottawa persuaded its reluctant Kyoto partners to agree to a scheme whereby it could gain credit for the amount of carbon dioxide absorbed by its forests, which the EU said would effectively permit Canada to increase its emissions by five percent in 2010 from 1990 levels.

Canadian Environment Minister David Anderson now wants another change to Kyoto to give Canada credit for clean energy exports to the United States. When he ignored private warnings from irate EU delegates to desist, the 15-nation bloc went public at the G8 meeting to say the idea was ludicrous.

"We are totally fed up with the games the Canadians are playing. It is salami tactics - they get some of what they want and then they come back for more," an angry aide to EU Environment Commissioner Margot Wallstrom told Reuters.

Cynics now wonder whether Anderson will push ahead with the clean energy proposal in an effort to use it as an excuse for ditching Kyoto while seeking to blame the European Union.

For all the unhappiness with Anderson there is no doubt that Washington's decision to abandon Kyoto put huge pressure on Canada, which is the largest single supplier of energy to the United States.

Canada exported C$55 billion ($35 billion) worth of gas and oil last year, most of it to the world's most powerful nation, and energy producers profiting from the booming trade say signing up to Kyoto could cost billions of dollars and tens of thousands of jobs.

Their loud and well-orchestrated complaints have clearly struck a chord with Natural Resources Minister Herb Dhaliwal and Industry Minister Allan Rock, who both recently warned against rushing to ratify Kyoto.

"I think Anderson and the Canadian government are at a critical moment now. Their position is incredibly mushy. We really don't know if they're going to stand up to the corporate interests and U.S. pressure," said Benedict Southworth, climate change director for Greenpeace.

While the United States insists it is not trying to persuade Canada to abandon Kyoto, there is little doubt Washington would welcome another defector to its ranks.

But that could pose major problems for Prime Minister Jean Chretien, under fire from some inside the ruling Liberal Party who say he has already sacrificed enough sovereignty to the United States in the wake of the Sept. 11 attacks.

Ottawa's intentions will become clearer over the next six weeks. In early May it is due to release an official estimate as to how much Kyoto will cost and in late May federal and provincial environment and energy ministers will gather to hear Anderson explain how Canada would fulfill its commitments.

Anderson has continually stressed that before Ottawa ratifies Kyoto it wants to ensure that no one part of the country will suffer unduly.