The bill, which goes before European Parliament committees this week and is known as REACH (Registration, Evaluation and Authorisation of Chemicals), is designed to protect people and the environment from adverse effects of chemicals found in products ranging from cars to computers.
Chemical makers would have to register the properties of substances with a central EU database. Those of highest concern, such as carcinogens, would undergo a risk assessment and the most dangerous would require special authorisation.
Britain has produced a compromise draft for member states to debate. But critics say it has lost too much of its environmental bite.
Specifically, it cuts registration requirements for low-volume chemicals, fails to force companies to substitute alternatives for substances deemed hazardous and may leave out hormone-disrupting substances, environmental group WWF says.
"We're disappointed at the number of concessions that have been made to industry and lack of improvements to human health and environment compared to the Commission proposal," WWF toxics programme officer Justin Wilkes said.
Britain, which chairs the council of member states in its role as president, said the proposal was an attempt to make the massive bill workable and politically palatable.
"We wouldn't accept that the will of the council is strongly in the direction of watering down essential controls in terms of public protection," said a UK official close to the dossier who asked not to be named, as member states have yet to debate the draft. "We're also looking for something which is workable."
Environmentalists were especially critical that the draft reduced the registration requirements for low-volume chemicals, produced or imported in amounts of 1-10 tonnes a year. These chemicals make up about two thirds of the substances covered by REACH.
"We are still disappointed that they are trying to lower the requirements for the majority of chemicals", said Nadia Haiama, Greenpeace senior policy officer.
WWF's Wilkes said the change would result in legislation that would fail to produce a sufficient body of health information on those chemicals, which was the goal of REACH.
But the British official rejected the criticism.
"It's always been our view that you can reduce those requirements without fundamentally increasing hazards to the environment or to the citizens," he said.
Key committees in the European Parliament start voting on thousands of amendments to the bill on Tuesday in Brussels, and pressure to adjust the bill in the European Commission -- the original author of the bill -- is also high.
EU Environment Commissioner Stavros Dimas told reporters at a meeting of environment and agriculture ministers at the weekend that he was pushing for REACH to meet its environmental and human health objectives without hurting industry.
"I am for the environment," he told reporters. "You have to see what you can politically achieve."