A controversial EU Directive, which many Christians fear will undermine free speech and freedom of religion, is being held up in negotiations between European member states.

The Directive seeks to outlaw discrimination on grounds including sexual orientation and religion in the provision of goods and services, and includes a harassment provision which threatens free speech. Critics have warned that that the Directive will result in secular values governing how Christian organisations provide goods and services to the public.

In July last year Britain’s Roman Catholic leaders branded the Directive an “instrument of oppression”. They warned that if the Directive were implemented “the EU would effectively be dictating to religious bodies what their faith does or does not require: a wholly unacceptable position”.

The Bishops’ Conference of England and Wales and the Bishops’ Conference of Scotland made the comments in a joint response to a UK Government consultation on the proposed Directive.

There also have been warnings that the plans would hand power to Brussels to control sensitive and important matters of discrimination law, such as the extent of exemptions to protect religious freedom.

Similar laws introduced in the UK in 2007 led to the closure of Roman Catholic adoption agencies. Now, however, a report by the Spanish Presidency of the EU has highlighted divisions between member states over the Directive.

The Directive can only become law if all member states agree to it at a meeting of the Council of the EU. The Spanish Presidency’s report also says the Directive must balance protection from discrimination with the right to religious liberty and free speech.

And it concludes that “there is a clear need for extensive further work on the proposal”. A press release from an EU Council sub-committee states: “Despite some progress, further discussions are needed on numerous issues.”

News website EUObserver says that the Belgian presidency of the EU has told the European Commission that there is not enough support for legislative action.

In Germany the two governing parties have said that the Directive is “not fit for purpose”, and there are also concerns in the country over the cost of implementing the Directive’s proposals.

Other countries, including the Czech Republic, France and the UK, are concerned about Brussels taking power away from their own parliaments.

Last year there was a warning from business leaders over the impact the Directive would have on already-struggling businesses. In 2008 the Czech Senate criticised the Directive saying they wanted to deal with discrimination law on a national basis.