The controversial TTIP trade deal between Europe and the US could depress workers’ wages by £3,000 a year and allow “corporate wolves” to sue the government for loss of profit, MPs have heard.

The claims were made in a highly-charged House of Commons debate, with many Conservative MPs defending the proposed Transatlantic Trade and Investment Partnership free trade deal and opposition MPs warning that it risks giving too much power to big US corporations.

Anti-TTIP campaigners claim one million people have signed a petition against the deal, mainly because of worries that it could open the door to US health companies running parts of the NHS. This has been firmly denied by the UK government and the European commission, who have said public services are explicitly excluded.

However, Labour is still worried that the proposals not do enough to protect the public interest. Many MPs have particular concerns about the investor-state dispute settlement clauses, which would give private companies the right to sue the government in international tribunals for loss of profit arising from policy decisions.

Labour MP Geraint Davies, who called the debate, urged negotiators to drop controversial clauses, insisting the judicial system in each country was sufficient protection in mature democracies. His motion called for the UK parliament to play a role in scrutinising any eventual deal, instead of it being passed exclusively by Brussels.

“The harsh reality is this deal is being stitched up behind closed doors by negotiators with the influence of big corporations and the dark arts of corporate lawyers - stitching up laws that will be quite outside contract law and common law, outside the shining light of democracy, to in fact give powers to multinationals to sue governments over laws designed to protect their citizens.”

“My view is we should pull the teeth of the corporate wolves scratching at the door of TTIP by scrapping the investor-state dispute settlement rules altogether and so we can get on with the trade agreement without this threat over our shoulder.”

Caroline Lucas, the former Green party leader and MP for Brighton Pavilion, said she believed TTIP amounted to a corporate takeover and cited independent research from Tuft University suggesting workers’ wages could suffer by £3,000 a year.

“Countries like the Czech Republic, Slovakia and Poland who are in trade agreements which include this kind of investor-state relationship have been sued 127 times and lost the equivalent money that could have employed 300,000 nurses for a year,” she said.

“The idea this isn’t a problem is patently wrong; this is about a corporate takeover and that is why it is right to oppose this particular mechanism.”

One Tory MP to object to aspects of the current deal was Zac Goldsmith, the member for Richmond Park, who said TTIP would lead to reduced food standards because of lower US levels.

“Free trade agreements are normally about reducing tariffs to trade, taxes and so on on imports and exports. There are some but there are very few between us and the States so the focus will be on standards,” he said. “In many respects, it is hard to imagine harmonisation of standards between the EU and the US resulting in better standards for us.

“Take food … our standards are I think undeniably higher than the standards applied in the US on a whole range of issues - hormones in beef and pork, the use of steroids, chlorine treated chicken meat, clear labelling of food processes – we have a fundamentally different approach. We are told by our government that the food standards are safe, nothing is going to happen, but try telling that to US agro-business giants who have been engaging in an orgy of lobbying and who have very high expectations.

“I ask members of my own party, why is not OK to hand the reins of our ancient democracy to an unelected EU bureaucracy but it’s absolute fine, it’s great to allow those same unelected Eurocrats to delegate our same democracy to unelected multinational corporations?”

The deal was defended by Matthew Hancock, a Conservative business minister, who said concerns about TTIP were scaremongering and misleading. The government claims TTIP could benefit families by £400 a year through cheaper prices.

“TTIP is about fair and free trade,” he said. “The conclusion that trade raises wages and prosperity is one that is borne out not only in the theory and the evidence. That has happened in the decades that I have been on this earth in a greater way than any other time in history.”

He said the investor-state dispute settlement clauses were necessary to protect companies investing in areas covered by the deal.

Following the debate, Allie Renison, head of EU and trade policy at the Institute of Directors, said the debate had been misinformed and was risking the entire deal.

“MPs need to engage properly in the discussions around TTIP rather than jumping on the misinformation bandwagon that is currently rolling across Europe,” she said. “IoD members are clear that we need the deal, with nine out of 10 backing it to create jobs and growth.

“Many of TTIP’s loudest opponents claim to be in favour of free trade, while hiding their protectionist agenda behind misleading scaremongering about the NHS and investor-state dispute settlement.

“Trade unions, meanwhile, have mistakenly tried to paint TTIP as the plaything of multinationals, despite the fact that small- and medium-sized enterprises actually stand to benefit the most. Politicians who are close to trade unions have a particular duty to stand up and make the case for increasing exports and boosting inward investment.”