Europe's plan to lead the world towards a deal on fighting climate change has been seriously imperilled by a backlash by Italy, Poland and other east European nations wary of the short-term costs.

France, which holds the European Union's rotating Presidency, has staked its reputation on finalising the plan to cut EU carbon emissions by a fifth by 2020.

Few think French President Nicolas Sarkozy will fail to broker agreement this year, but many fear that amid an economic crisis he might hand out so many concessions to reluctant states that the final laws do little to prevent global warming.

And with Europe's credibility damaged, it will struggle to coax China, Russia or other major emitters to agree to meaningful emissions cuts at a meeting in Copenhagen next year to agree a successor to the Kyoto Protocol after 2012.

"The French Presidency has really shown willing, but the attitude of Sarkozy has been to accept any demands for compromises," said Cecile Kerebel of French think tank IFRI.

"I think we'll get something, but there's a real risk that in the end the package will have no value in fighting climate change," Ms Kerebel added.

Time is short. The European Parliament breaks for elections next May.

And most EU diplomats have low expectations of progress after December when France hands over the EU presidency to the Czech Republic - currently split by a political power struggle and led by a president who is cynical about climate change.

Former communist nations have long complained that the bloc's plan to cut carbon emissions would create unbearable costs by forcing them to replace dozens of highly-polluting coal-fired power stations.

The alliance had appeared fragile, but last month it gained an unexpected ally when Italian Prime Minister Silvio Berlusconi threatened to veto the EU climate plan to protect Italy's manufacturers and its powerful auto industry. East European countries want to continue to give free carbon emission permits to their power plants under the EU emissions trading scheme. Italy is concerned about the impact of carbon costs on the competitiveness of its export sector.

Giving factories and power plants more free permits could lead to a domino effect of other demands to soften the deal.

Any failure to reach a strong agreement would also weaken the bloc's stance in Copenhagen in 2009 to get a global deal.

"We've heard from other negotiating ministers that its very important what Europe can achieve," Swedish Environment Minister Andreas Carlgren said. "The European Union would lose a great deal of prestige if it failed to reach agreement."

That scenario has left Mr Sarkozy little choice but to strive for a deal by December while placating opposition from Europe's big auto makers, heavy industries and, above all, eastern Europe.

"I think we'll find ways to solve problems of individual countries - that's the art of politics," said Mr Carlgren.

Environment group WWF says plans to weaken the bloc's climate legislation would put the world on track for a global temperature rise of 2.8°C, bringing drought to two billion people, death to coral reefs and mass extinctions of animals.

Such a threat has set minds in Brussels to thinking how the east European alliance might be broken apart, possibly by handing out funding to pay for low-carbon alternatives to coal, or by linking them to an EU power grid. "I think that alliance can be picked apart, because what they really want is recognition of their reliance on coal and the obstacles they face in switching to gas," said Simon Tilford at London's Centre for European Reform.

"I think it just needs a financial re-jig."

The economic crisis has done little to help, with nations like Germany and Italy arguing that if curbs on carbon and a consumer downturn strike simultaneously, big employers like BMW and Fiat might be hit.

Other nations, including Britain, counter that cutting oil consumption is good for consumers and new green industries like electric cars could replace jobs lost in polluting industries.

"It is beholden on the countries that pushed for this to stick to their guns, and that's where Germany could be a problem," said Mr Tilford. "If Germany asks for too many concessions, there's a risk of it becoming a free for all."

Sweden's Carlgren was optimistic, noting that while countries like Poland wanted the cost of emissions cuts to be eased, they were not challenging the need to cut.

Many diplomats say Poland wants to reach a compromise to improve the chances of success when it hosts a UN-led meeting of global environment ministers in Poznan on December 12 - the same day EU leaders try to clinch their own climate deal in Brussels.