A Labour MP has accused corporate lawyers of a ‘stitch-up’ over ongoing efforts to secure a controversial EU-US trade deal.

Geraint Davies told the House of Commons yesterday that multinational giants are seeking to bypass democracy through the Transatlantic Trade and Investment Partnership.

Davies secured the backbench business committee debate after receiving support from around 60 MPs, trade unions and environmental groups.

Business minister Matthew Hancock has pledged the deal to create free trade and markets could be worth as much as £10bn to the UK economy, without limiting the government’s regulatory powers.

But Davies said the UK and European parliaments should have the opportunity to scrutinise and change the terms in advance of the deal being signed, rather than wait for an agreement to be struck behind closed doors that will simply be ratified by politicians.

‘The harsh reality is that this deal is being stitched up behind closed doors by negotiators, with the influence of big corporations and the dark arts of corporate lawyers,’ said the Swansea West MP.

‘They are stitching up rules that would be outside contract law and common law, and outside the shining light of democracy, to give powers to multinationals to sue governments over laws that were designed to protect their citizens.’

Davies said he was not opposed to the agreement in principle, but there remain questions over employment rights, ownership of public services and standards of animal welfare in food production.

The debate also covered the highly controversial proposed investor-state dispute settlement mechanism, which would grant an investor the right to use dispute settlement proceedings against a foreign government. France has said it would not support the inclusion of the mechanism in a potential deal, which could give companies the opportunity to take legal action against a state whose legislation has a negative impact on their economic activity.

Conservative MP Julian Smith said 90 examples of ISDS are present in deals between the UK and other states which have not led to any successful cases against Britain.

Smith said the ISDS provisions will protect investors from ‘discriminatory treatment by protectionist governments’.

But fellow Conservative MP Zac Goldsmith voiced fears that TTIP will undermine UK courts.

He added: ‘The ISDS effectively allows foreign businesses to sue governments for policy decisions that impact on their future profits. That would happen not through our domestic courts, but through new investor tribunals.’

In a statement, business minister Hancock pledged that parliament will have an opportunity to scrutinise the final text of the TTIP before it is ratified.

He added that the government has successfully pushed the European Commission to declassify more documents for scrutiny and is pressing for MPs to have greater access to confidential texts.

‘Before we can have that debate [in parliament] there are difficult negotiations ahead of us. But let us not lose sight of the huge prize offered by TTIP,’ he said.

‘Not only more choice at lower cost, to the benefit of all - but a symbol of international cooperation, an inspiration to other, less happy nations to choose capitalism over conflict, free exchange over armed aggression.’