The European Parliament has blocked plans to extend maternity leave from 14 to 20 weeks and to give fathers of newborns the right to two weeks paid parental leave.
The proposal made by the European Commission and the EP's Women Rights Committee was given the thumbs down during a vote during the last EP session before the June elections.
MEPs, particularly from the EPP-ED group, said that the proposal was not yet mature enough and was full of contradictions.
As many as 89 amendments to the original proposal were submitted by political groups suggesting a range of different extensions.
Some groups suggested adding just two weeks to the 14 established under maternity leave laws while others wanted six more. The Greens wanted to go further than that.
The EPP's shadow rapporteur Astrid Lulling said: "This rush by the EP... to have this legislation passed without any serious debate before the elections would send an unclear message to the member states which finally have to approve the law. We can't have half-baked proposals."
On the other hand, the Socialists accused the Conservatives of "showing their true colours and betraying the well-being of millions of women who want a better balance between their family life and work".
Malta's five MEPs were divided over the issue and decided to follow the respective stand of their political groups.
While the three Labour MEPs voted against referring this legislation to the Women's Rights Committee, the Nationalist MEPs agreed with the EPP group that the proposal needed further discussion.
"We want to give mothers the right to have more maternity leave and are open to even consider an additional full six weeks to the current 14 already enjoyed by Maltese mothers," Nationalist MEP Simon Busuttil said.
However, the proposal had too many contradictory amendments and would have eventually been stopped at EU Council (member state) level, he said.
"Thus, we voted in favour of referring the issue back to the committee in order to come up with a more precise position next time round," he said.
On the other hand, Labour MEP Louis Grech shot down claims that the proposal was not mature and said the EPP wanted to block it since many conservative governments opposed the move due to its costs.
"We were in favour of having a discussion over this important legislation with the EU Council (member states).
"The EPP succumbed to pressure from the business lobby and governments and decided to torpedo the proposal," Mr Grech said.
The EP's decision means the process will have to start from scratch once a new parliament is formed after next month's elections.
Under European law, dating from 1992, employers must offer 14 consecutive weeks of maternity leave and the new package would have extended the period by six weeks. The proposal also suggested that fathers would also be entitled to two weeks' paternity leave.
The package did not have the support of all EU member states, as the 20-week plan would require some countries to make significant changes to national legislation.
Germany led opposition to the move, claiming it would make it more financially risky for employers to hire young women who might fall pregnant and dent their chances of finding a job.
Malta also had had its reservations saying it would come at an additional cost.
Although expressing himself in favour of more support to women to reconcile work and family-life balance, Social Policy Minister John Dalli had warned that the proposal might have negative repercussions particularly on SMEs.
He also questioned the timing of this proposal particularly as Europe is trying to maximise competitiveness in an effort to retain employment in the current economic crisis.