The agreement, thrashed out at a summit in Brussels despite a series of objections from some eastern European members and France, gives the EU "ambitious and credible" targets to tackle climate change, said the German chancellor, Angela Merkel.

Ms Merkel, whose country holds the EU's rotating presidency, has led efforts to agree the deal, hopeful that an EU example will see other major polluters such as the US and China agree to emissions cuts.

She plans to present her plans to a summit of the Group of Eight industrialised nations that she will host in June.

"We have time still to reduce global warming to below two degrees," Ms Merkel said as she announced the plan.

"We could avoid what could well be human calamity."

The deal - described by Jose Manuel Barroso, the president of the European commission, as "the most ambitious package ever agreed by any institution on energy security and climate change" - makes a commitment to cut greenhouse gas emissions by at least 20% from 1990 levels by 2020.

By the same date the EU also wants 10% of its cars and trucks to run on biofuels, and to ensure that 20% of its power comes from renewable energy sources such as solar and wind power and hydroelectricity.

It is the latter measure that has caused the most disagreement, with some eastern European nations who joined the bloc in 2004 arguing that they do not have the money to end their reliance on oil and coal.

Renewable energy sources currently account for less than 7% of EU energy use.

Some of these less warm, landlocked countries also argue that they are handicapped in developing wind, solar and water-based power sources compared to nations such as Denmark and Spain.

Meanwhile France - which gets 80% of its power from nuclear power plants - has joined the Czechs, Bulgarians and Slovaks in arguing that nuclear power should be included in Europe's plans to switch to a low-carbon economy.

The deal attempted to find a compromise agreeable to all, setting an overall 20% target for renewable energies for the EU as a whole but allowing individual targets for each of the 27 members.

"A differentiated approach to the contributions of the member states is needed, reflecting fairness [and] taking into account national circumstances," it says. It tasks the EU's executive commission with establishing national targets for each country.

It promises energy solidarity between EU nations in the event of a supply crisis, as demanded by Poland.

The deal also says it is up to each member whether to use nuclear power, and notes a report that says nuclear energy could help reduce CO2 admissions and alleviate worries about energy supply security.

Ms Merkel says that nuclear power does not constitute a renewable energy, but has conceded that it may be considered as part of an overall carbon reduction plan.