By William James and Elizabeth Piper
LONDON (Reuters) - Britain published legislation on Thursday to sever political, financial and legal ties with the European Union, an important step toward Brexit but one which the opposition said it would challenge.
The repeal bill is central to the government's plan to exit the EU in 2019, disentangling Britain from more than 40 years of EU lawmaking on everything from finance to fisheries and repealing the treaty that first made Britain a member in 1972.
Its passage through parliament could make or break Theresa May's future as prime minister. The election she called last month cost her an outright parliamentary majority and reopened the debate on the nature of Brexit, with Britain's public spending watchdog now saying the government is not well prepared.
"It is one of the most significant pieces of legislation that has ever passed through parliament and is a major milestone in the process of our withdrawal from the European Union," Brexit minister David Davis said in a statement.
The government also fleshed out its negotiating stance with the EU, publishing three position papers which underlined that Britain would quit nuclear body Euratom and leave the jurisdiction of the European Court of Justice.
May faces a battle even within her own Conservative Party to stick to her plan of a clean break. Pro-Brexit lawmakers will give her little room for movement, while pro-Europeans are looking to soften the divorce terms.
Rebellion by either side could derail the legislation and test May's ability to negotiate a compromise or find support from opposition parties. If she fails, her position could swiftly become untenable.
ROAD TO "HELL"
The publication of the bill is the first step in a long legislative process to ease Brexit, which is stretching the government with the sheer volume of issues to cover.
A report by the government's spending watchdog said Britain's planned new customs system, essential to smooth trade, might not be ready in time for Brexit, adding to a list of concerns over the government's plans.
"We have been clear from the outset that we are putting the resources in place, have got the resources in place that we need to deliver on Brexit," May's spokesman told reporters.
The parliament has yet to set a date to debate the bill, which will be closely examined to see how the government plans to carry out the difficult and time-consuming technical exercise of transposing EU law.
The bill set out powers for ministers, with the approval of parliament, to correct laws to ensure they work after being brought into British law. These powers will exist until two years after the day Britain leaves.
A government document, released alongside the bill, offered the example of current town and planning regulations which now refer to "other EEA (European Economic Area) states". That would need to be changed to "EEA states", dropping the 'other', for the regulations to work.
In other areas, existing laws require Britain to seek an opinion from the European Commission before a project is approved - something also that will need to be changed.
Lawmakers have expressed concern that the sheer volume of work could limit their ability to scrutinize the changes effectively and fear the government will introduce policy change by the back door.
The main opposition Labour Party has said it would oppose the bill unless it met six conditions, including guarantees for workers' rights. Tim Farron, leader of the Liberal Democrats, said he would work to soften May's stance, promising the prime minister that "this will be hell".
The bill will also face scrutiny from British companies, many of which have spent the year since Britons voted by 52 percent to 48 to leave the EU trying to figure out how the change will affect their business.
"A legislative transition of this scope has never before been undertaken," Adam Marshall, director general of the British Chambers of Commerce (BCC), said in a statement.
"We will be keeping a watchful eye for the possibility of unintended consequences that lead to new burdens or compliance costs."
(Editing by Ralph Boulton)