Rachel Reeves has been accused of "leading an ideological charge" against nature since coming into power. The RSPB and The Wildlife Trusts warned the Government's Planning and Infrastructure Bill undermines its commitment to protect the natural world.
Craig Bennett, chief executive of The Wildlife Trusts, said: "Before the general election, Labour promised to restore nature. "Under a year later, the Chancellor is leading an ideological charge against the natural world despite it being the very foundation of the economy, society and people's health. Promises have been broken, and millions of people have been betrayed.
"The Government's Planning and Infrastructure Bill, in its current form, fundamentally undermines its commitment to protect nature.
"The so-called Nature Recovery part of the Bill is a Trojan horse - it's a misnomer because, in reality, it is a licence to destroy.
It replaces vital nature protections with a weaker substitute, and has been described by the Government's own nature watchdog as 'environmentally regressive' because it puts irreplaceable habitats and threatened species at risk."
The Bill, which finished committee stage on Thursday, was introduced in March, following months of claims from the Chancellor that nature protections were a blocker on development and pledging action to spur on growth.
But the Office for Environmental Protection has declared that the Bill will cause environmental regression.
It overrides existing habitat and nature protections, which the Government considers to be a barrier to housebuilding and economic growth.
Green groups have warned that any commitments required of developers to restore and improve nature will not be guaranteed to benefit the communities who lost their local natural spaces.
Compensation could take place miles away or even in another county.
The groups said places such as the New Forest, Surrey Heaths, Peak District Moors, Forest of Bowland and rivers such as the Itchen in Hampshire will no longer be as strongly protected from development.
Beccy Speight, RSPB chief executive, said: "Despite engaging in good faith with the UK Government for many months, it's now clear that the Bill in its current form will rip the heart out of environmental protections and risks sending nature further into freefall.
"The fate of our most important places for nature and the laws that protect them are all in the firing line. The wild spaces, ancient woodlands, babbling brooks and the beautiful melody of the dawn chorus - it's these natural wonders that delight people all over the country and support our physical and mental health that are under threat. That cannot be allowed to stand.
"The evidence clearly shows nature isn't a blocker to growth. The government has identified the wrong obstacle to the problem it's trying to overcome, and that has led it to the wrong solutions. With no meaningful amendment in sight, the complete removal of Part 3 of the Bill is the only responsible option left."
A Government spokesman said: "We completely reject these claims. The government has inherited a failing system that has delayed new homes and infrastructure while doing nothing for nature's recovery, and we are determined to fix this through our plan for change.
"That's why our Planning and Infrastructure Bill will deliver a win-win for the economy and nature by unblocking building and economic growth, and delivering meaningful environmental improvements."
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