"It's a comprehensive system we believe will be a workable balance between protecting the environment and safeguarding the competitiveness of industry," said Per Haugaard, spokesman for EU Enterprise Commissioner Erkki Liikanen.

The onus would be on any firm that makes, imports or uses chemicals to prove its products are safe or stop using them.

The plan has sparked industry fears it may needlessly burden companies with red tape. But environmentalists say the measures are needed to restrict chemicals that can cause cancer, mutations, mimic hormones and linger in the environment, posing serious risks to human and animal fertility.

"We welcome the fact that progress is being made and we support the basic approach," said Michael Warhurst, chemicals policy campaigner at environmental group WWF. "But we are very concerned about some of the detail."

Warhurst said the draft law did not impose enough pressure on companies to switch to safer alternatives and that highly toxic chemicals could continue to be used if firms could prove their socio-economic benefits outweigh the risks.

BUREAUCRATIC MONSTER

Currently any chemicals already on the market before the existing EU regime was created in 1981 do not have to be registered and tested for safety in the same way that new substances do.

Under the Commission's "Reach" system (Registration, Evaluation and Authorisation of Chemicals), some 30,000 chemicals would have to be registered with a new EU chemicals agency. Those that don't pass the test will be banned.

The EU's chemicals industry, which employs 1.7 million people and has annual sales of 519 billion euros, has been lobbying the Commission to avoid measures that put one of Europe's biggest industry's at an economic disadvantage.

The industry has been calling for exemptions from the Reach system for intermediates - chemicals used in closed processes within factories, and for polymers.

Eggert Voscherau, President of the European Chemical Industry Council, said the Commission had to choose between an approach that would allow continued economic growth "or it can unleash a 1,200 page regulation that will have a huge negative impact on growth and innovation throughout European industry".

Because the law would affect imports, the Commission, the EU's executive arm, had been careful to ensure it complied with World Trade Organisation rules, Haugaard said, adding that other countries were considering new chemicals regulations.

The EU move is partly a fulfilment of its pledge made at the World Summit on Sustainable Development in Johannesburg last year to minimise the harmful effects of chemicals on human health by 2020.

The bill is being issued under a new procedure where interested parties are invited to comment before it goes for approval by EU governments and the European Parliament.