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The government is to ditch plans to scrap up to 4,000 EU laws by the end of the year after a private meeting with Brexiter MPs.

It now aims to remove 800 statutes and regulations, instead of 3,700 laws it had lined up for a “bonfire” of EU law in December, threatening everything from passenger rights and compensation for cancelled flights, to equality employment law and environmental standards and protections.

The plan emerged after the trade secretary, Kemi Badenoch, briefed Eurosceptic MPs in the European Research Group at a meeting on Monday.

Sources have confirmed the plan discussed at that meeting to slash the number of laws targeted by the bill, which is expected to return to the House of Lords on 15 May.

However, one of the bill’s staunchest critics, Stella Creasy, the Walthamstow MP and chair of the Labour party movement for Europe, said a smouldering bonfire did nothing to address the sweeping powers the bill was giving ministers to change laws without due scrutiny.

“All those wanting to defend parliamentary sovereignty should be wary of the government using the promise not to delete vital rights now as a Trojan horse to get this legislation through parliament and then use the powers in it to destroy legislation later,” she said.

“The retained EU law bill in its current form still seeks to use Brexit as an excuse for a ministerial power grab, which is why we will continue to work with colleagues across the house and campaigners in all quarters to protect the role MPs play in making laws from an overbearing and often unaccountable executive.”

Any climbdown on the legislation tabled by Jacob Rees-Mogg as a “Brexit freedoms” bill risked angering hardline Tory Brexiters but the depth of opposition to it from business, environmental groups, unions and Brussels has left ministers with no option but to consider a full-scale delay or a scaled-down version.

A government spokesperson said: “We remain committed to ensuring the retained EU law (REUL) bill receives royal assent and that the supremacy of EU law ends with unnecessary and burdensome EU laws removed by the end of this year.

“Once passed, the bill will enable the country to further seize the opportunities of Brexit by ensuring regulations fit the needs of the UK, helping to grow our economy and drive innovation.”

Among the 800 laws on the “to save list” are the working time directive, which protects working hours and environmental legislation.

Under the bill, laws that were not actively saved or updated would automatically face the axe on 31 December under a controversial deadline known as a “sunset clause”.

William Bain, the head of trade policy at the British Chambers of Commerce, urged the government to scrap the clause, given the BCC’s view that businesses are just starting to regain confidence after years of battering by the pandemic, energy prices and inflation. “Now is not the time to knock that with a hasty sunset clause across vast areas of UK regulation,” he said.

Badenoch’s plan reportedly went down “like a lead balloon” at the meeting with the ERG, but sources said she told the MPs that it was the practical solution to getting the controversial bill through this year.

Last month, the Observer revealed that the government had begun a full-scale retreat over the bill, which had been criticised not only for its attempt to sweep thousands of laws off the statute books but the “unprecedented” powers it gave ministers to update, reform or axe laws without the usual parliamentary scrutiny.

Legal experts labelled it “undemocratic” and an “invitation to litigation”, while environmental groups and trade unions launched high-profile campaigns to stop the bill, first tabled by Rees-Mogg as a Brexit freedom bill.

Efforts to kill off the bill were further fuelled when it emerged there was little capacity in the civil service to scrutinise each law and draft updates or recommendations by the deadline of December.

Badenoch reportedly told MPs that civil servants had told her that the timeframe was unviable, with the majority of the EU law transferred over to domestic statute books in environment and agriculture sectors, where the government faced high-profile concerted campaigns against their plan.

The list of laws targeted by the government includes bans on animal testing for cosmetics, passenger compensation rights for those whose flights are delayed, equal pay for men and women, and pension rights for widows of same-sex marriages.

It recently emerged that 25 groups concerned about safety standards, including the TUC and the British Safety Council and the Royal Society for the Prevention of Accidents, had said the government’s timetable created dangerous uncertainty.

The government approach was further undermined when it emerged that it did not have a handle on the number of laws that would be affected by the bill.

Its “dashboard” initially listed 2,000 laws, but in the past month it had added another 1,700 after research at the National Archive, fuelling fears that some critical legislation could fall through the cracks and be deleted from the statute books.