BRUSSELS (Reuters) - The European Union is set to agree on Thursday to a watered-down anti-racism law, reflecting wide divergences among the bloc's 27 states on how to tackle racism and genocide denial, diplomats said.
The bloc has struggled for almost six years over proposals for an EU-wide anti-racism law, wrangling over the limit between freedom of expression and a will among some to crack down on Holocaust denial, Nazi symbols and criticism of religion.
"The protracted discussions have resulted in a weak text, which will not require substantive changes to the legal orders of many member states," rights group European Network Against Racism (ENAR) said.
EU diplomats said Nordic countries such as Denmark and Sweden favoured freedom of expression, while others such as France or Germany were tougher on punishing racist statements.
"There was a real struggle between the two poles," one diplomat said.
The publication by a Danish newspaper of 12 caricatures of the Prophet Mohammad sparked protests in the Middle East and elsewhere last year and highlighted divisions in Europe about how far freedom of expression can go.
According to a draft text seen by Reuters, justice ministers will agree in Luxembourg on Thursday to punish incitement to hatred or violence against a group or a person based on colour, race, national or ethnic origin by one to three years jail.
However EU states can choose to limit punishment to those cases likely to disturb public order and the text states that an individual country's rules on freedom of expression can always take precedence over it.
EU states also failed to agree on whether to outlaw claims that the massacre of Jews by Nazi Germany never took place. There will also be no EU-wide ban on Nazi symbols.
Countries agreed to allow each to retain its own legislation on genocide denial and would not oblige them to cooperate in judicial investigations, diplomats said.
According to the draft, EU states must punish Holocaust denial only when it is "likely to incite to violence or hatred."
Countries such as France already have laws punishing those who deny 6 million Jews were killed by the Nazis during World War Two, while others such as Denmark and Sweden allow statements that it never took place.
Diplomats said Britain had also limited an EU-wide ban on incitements to religious hatred in the proposed law.
The new legislation will make punishing incitements to hatred against religion compulsory only if also linked to an incitement to hatred against national or ethnic origin, a race or a colour, the draft of the text shows.
EU justice ministers will adopt the legislation on Thursday if they solve one outstanding issue, diplomats said, whether to mention denial of crimes committed under Stalin communist rule.
Baltic EU states -- incorporated into the Soviet Union by force in 1940 and subjected to five decades of repressive rule -- wanted the text to mention the possibility of prosecuting denial of "crimes against humanity under the Stalin regime". Other countries considered this had nothing to do with racism.