Brussels will be forced to water down tough data protection rules in a move that will come as a relief to tech groups after many of the EU’s member states called for a softer approach to the privacy push.

The climbdown will be welcomed by companies that collect large amounts of personal data, such as Google and Facebook, which have lobbied furiously against the proposed regulation, as well as the US government.

Washington has repeatedly voiced its concern that the rules, which include the power to fine companies up to 2 per cent of global turnover for breaching onerous data protection standards, were targeted specifically at US technology groups.

Resolving the transatlantic dispute over data protection rules could ease the way towards a new EU-US trade agreement over the next two years, which boasts huge commercial potential but is also rife with complications.

The plan will be softened after at least nine countries – including the UK, Germany, Sweden and Belgium – said they were opposed to several proposed measures. – Copyright The Financial Times Limited 2013