The French presidency of the European Union on Thursday proposed a watered-down set of laws on fighting climate change in a bid to win EU backing at a crucial end-of-year summit.
In Brussels, EU leaders are set to debate a series of proposals from the bloc's executive, the European Commission, aimed at cutting emissions of greenhouse gases to 20 per cent below 1990 levels, in line with a pledge made by heads of state and government in March 2007.
Hours before the summit, the French government issued a new compromise proposal aimed at breaking the bitter deadlock over the questions of how much each member state should pay, and how the EU's vital industries should be protected.
The text, seen by Deutsche Presse-Agentur dpa, waters down a scheme for making heavy industries buy permits to emit carbon dioxide (CO2, the gas most linked with global warming) at auction.
The original commission proposal was that most industries should buy 20 per cent of their emission permits at auction in 2013, and that that proportion should increase to 100 per cent in 2020.
The idea behind the scheme is to make it so expensive for industry to emit CO2 that it becomes attractive to reduce emissions.
The latest French proposal is that such industries should only have to buy 70 per cent of their permits in 2020 - thereby weakening the incentive to invest in new, low-CO2 technology.
The commission had also proposed that power generators should have to buy all their permits at auction from 2013.
But after bitter protests from Poland, which is reliant on highly- polluting coal for most of its electricity, the French presidency proposed that power stations in poor, coal-reliant countries should only have to buy 30 per cent of their permits at auction in 2013, with full auctioning not becoming the rule until 2020.
The proposal is also aimed at placating Central and Eastern European member states such as Slovakia, Poland and the Baltic states, who say that the climate laws should give them credit for reducing their CO2 emissions between 1990 and 2005 - a period when their inefficient communist industries collapsed.
A new clause says those countries should be given 2 per cent of all the CO2 permits available for auction in the EU as a way of rewarding their "early efforts."
The idea looks set to spark a political storm, as it comes on top of a proposal to give the EU's poorest and most vulnerable states a further 10-per-cent handout of auctionable permits - a proposal which Britain and Germany have already criticized.
The French proposal also disregards a call from the commission for member states to use the revenue for auctioning on green projects, saying that the decision on where to spend the income lies solely with member states.
And its definition of which type of industry should be given free CO2 permits if international rivals do not sign up to similar climate-protection laws leads to the exemption of up to 90 per cent of EU industry, analysts say.
Finally, it adds a clause allowing EU member states to overshoot their annual emissions targets by 5 per cent in any year.
Diplomats hope that the bloc's leaders will approve a compromise at the summit by Friday, with the European Parliament due to give it final approval on Wednesday.