The Tánaiste, Ms Harney, has warned that an EU proposal to oblige industry to prove that chemicals are safe would make Europe's chemicals industry uncompetitive and could persuade pharmaceutical and electronics firms to shift production away from Ireland. Denis Staunton reports from  Brussels.

"Ireland has a huge proportion of the pharmaceutical sector in Europe and what we want to see is regulations that are balanced and fair and don't encourage companies to do things elsewhere and to supply the European market from outside the EU," she said.

The European Commission last week launched an eight-week period of consultation to check the viability of its proposed new chemicals policy. Under the policy, the burden of proof that chemicals are safe would shift from public authorities to chemicals producers.

A European chemicals agency would register, evaluate and authorise new chemicals and the industry would be obliged to provide safety data on all new chemicals they bring onto the market.

The Tánaiste said the proposal was imbalanced and would introduce more bureaucracy to the industry. "If it went through in its present form, it would make European industry uncompetitive in relation to the United States. I think we have to ensure that competitiveness is at the top of the agenda ," she said.

The European chemicals industry is lobbying fiercely against the Commission's proposal, claiming that it could lead to the loss of several hundred thousand jobs. Environmental groups have accused the industry of scare-mongering and the Commission says that the cost of setting up the new system would be less than the saving in health costs that safer chemicals would provide.