However Northern Ireland Secretary Brandon Lewis told MPs on Tuesday the legislation would breach international law in a “very specific and limited way”.
The comment by Mr Lewis provoked a furious reaction, including from some Tory MPs.
The Government has now published the new legislation which has intensified further anger in Westminster, Brussels and the international community.
The bill gives ministers the power to decide themselves – rather than in agreement with Europe – about checks on goods between Northern Ireland and the mainland as well as on state aid.
It also says that the provisions in the bill “must be introduced notwithstanding any relevant international or domestic law” – meaning that this legislation must be regarded first.
The European Commission has called for urgent talks with Britain as the Government set out its plans to override key elements of the Brexit deal signed by Boris Johnson.
European Commission president Ursula von der Leyen said she was “very concerned about announcements from the British government on its intentions to breach the Withdrawal Agreement”.
She tweeted: “This would break international law and undermines trust. Pacta sunt servanda = the foundation of prosperous future relations.”
European Council president Charles Michel also said: “The Withdrawal agreement was concluded and ratified by both sides, it has to be applied in full.
“Breaking international law is not acceptable and does not create the confidence we need to build our future relationship.”
Commission vice president Maros Sefcovic said he was seeking an urgent meeting of the joint EU-UK committee on the Brexit Withdrawal Agreement to enable the British to “elaborate” on their plans.
Speaking at a news conference in Brussels, Mr Sefcovic said he had raised his concerns in a phone call on Tuesday with Cabinet Office minister Michael Gove – his co-chair on the committee.
“I expressed our strong concerns and sought assurances that the UK will fully and timely comply with the Withdrawal Agreement, including the protocol on Ireland/Northern Ireland,” he said.
In the Commons, Mr Johnson defended the legislation, saying it provided a “legal safety net” to protect against “extreme or irrational interpretations” of the Northern Ireland provisions of the agreement which could lead to the creation of “a border down the Irish Sea”.
Influential Irish-American US Congressman Richard Neal has urged the UK to “uphold the rule of law” and warned that any US-UK trade deal would be dependent on protecting the Good Friday Agreement.
Rep Neal, who chairs the country’s Ways and Means Committee which oversees trade deals, said in a statement: “The United States is a guarantor of that historic peace accord, which was approved by the people of Ireland, north and south, in an unprecedented referendum.”
He added: “Every political party on the island opposes a return of a hard border. I sincerely hope the British government upholds the rule of law and delivers on the commitments it made during Brexit negotiations, particularly in regard to Irish border protocols.”
The Labour party said it is looking at “potential amendments” to the UK Internal Markets Bill amid “serious concerns”.
Keir Starmer’s spokesman said: “The Bill has just been published and we will publish a full response as soon as possible and look at any potential amendments.
“There are obviously serious concerns about the contents of the Bill, the implications on devolution and the implications on the Northern Ireland Protocol.”
The spokesman said Boris Johnson was “not very well briefed” over the allegation that Sir Keir was silent on Brexit after the Labour leader gave interviews on the subject on Tuesday.
Scotland First Minister Nicola Sturgeon tweeted: “In the General Election it was, according to the PM ‘oven ready’ – now, when they want to jettison it in breach of international law, it was ‘signed in a rush’. What a bunch of incompetent and unscrupulous chancers – and they are trashing the UK’s international reputation.”
Downing Street denied the UK Internal Market Bill is a power grab and said devolved administrations will instead see a “power surge”.
The Prime Minister’s official spokesman said: “Absolutely not. What the devolved administrations will enjoy is a power surge when the transition period ends in December.
“There will be no change to the powers the devolved administrations already have and the vast majority of powers with devolved competencies returning from Brussels will go straight to Holyrood, Stormont and Cardiff Bay.
“This will be a significant increase in the powers of the Scottish Parliament, the Welsh Parliament, and the Northern Ireland Assembly, which are already among the most powerful devolved administrations in the world.
“Where powers are coming back to the UK Government this is to protect the economy.”
Downing Street has also sought to justify the bill, saying the deal was written “at pace” in “the most challenging” circumstances.
The Prime Minister’s official spokesman said: “The Withdrawal Agreement and the Northern Ireland Protocol aren’t like any other treaty.
“It was agreed at pace in the most challenging possible political circumstances to deliver on a clear political decision by the British people with the clear overriding purpose of protecting the special circumstances of Northern Ireland.
“It contains ambiguities and in key areas there is a lack of clarity. It was written on the assumption that subsequent agreements to clarify these aspects could be reached between us and the EU on the details and that may yet be possible.”