Michael Gove has been accused of “green Brexit hypocrisy” for trying to weaken regulation of a suspected carcinogen found in sun creams, paints and toothpastes, in a proposal seen by the Guardian.

The European commission had proposed mandatory labelling and a cosmetics ban for titanium dioxide (TiO2) – a whitening chemical – after the European Chemicals Agency (Echa) declared it a “suspected carcinogen” last year.

Agency recommendations are normally rubber-stamped, as happened with glyphosate last year. But trade in TiO2 – which is also found in soaps, pills and biscuits – is highly lucrative and the UK has backed a fierce industry campaign against regulation.

The Green MEP Molly Scott Cato accused the UK environment secretary of “hypocrisy” after he previously condemned the EU for being “weak” on preventing regulatory capture.

“Behind the facade of Michael Gove’s ‘green Brexit’ lies the reality of Conservative attacks on regulation,” she told the Guardian. “Far from the ‘race to the top’ that Gove promised, in this area of potentially carcinogenic chemicals we see government ministers doing their best to block regulation and to stick up for industry whatever the cost to public health.”

More than 9m metric tonnes of TiO2 are produced annually and global trade is estimated at $13bn (£9.8bn) a year. Two-thirds of pigments produced around the world are thought to contain TiO2, which can be found in everything from white traffic lines to Oreo cookies.

But when inhaled, liquid and powder forms of the substance are a “possible carcinogen”, according to the World Health Organization’s cancer agency, IARC, and US health agencies, as well as Echa.

The European commission is due to propose TiO2 regulation in September but has already been forced to row back on its scope and ambition by the UK proposal.

The British paper, which is co-authored with Slovenia, raises concerns about the “socioeconomic consequences” of classifying TiO2 as potentially cancer-causing.

It also questions whether labelling is allowed for “particle toxicity” and repeats industry arguments about the potential impacts on recycling.

“In our opinion, TiO2 has no intrinsic or extrinsic property to cause cancer,” says the paper, which is now supported by several EU states.

However, one EU diplomat told the Guardian that the UK’s proposal was “a result of the [industry] lobby campaign”.

The lobby offensive led by the Titanium Dioxide Manufacturers Association (TDMA), has been described as “unprecedented” in its sweep, which includes the launch of a €14m (£12.4m) “Euro science” programme to stave off regulation.

The trade group argues that TiO2 has been safely used for a century and that its labelling now would lead to job losses, affecting “millions of workers in Europe and beyond”.

Its campaign has been “really huge, really heavy, and well organised”, according to the EU diplomat. “We saw them several times and they would outnumber us. They brought more than 15 people.”

EU member states and their national institutions were also contacted by the lobbyists, who tried to instigate dissent between them, according to the diplomat.

“They had the power to hire good lawyers. We received several letters and it was like they were giving us orders.”

Campaigners are gearing up to protest against any EU retreat from regulation of TiO2, with a report by Corporate Europe Observatory today saying that the TDMA paid the Brussels lobby firm, Fleishman-Hillard, up to €499,000 last year.

Tatiana Santos, a spokeswoman for the European Environmental Bureau, said: “It is really quite outrageous to learn that companies are investing so much in order to prevent the public from knowing about the hazards of the chemicals they are being exposed to.”

The government’s Health and Safety Executive denies any impropriety and insist that Britain’s TiO2 proposal followed “routine stakeholder engagement activities”.

“The UK’s actions are not a response to industry lobbying,” the official said. “We continue to work to find an effective solution that applies not just to titanium dioxide, but also to other similar substances.”

