Boris Johnson has urged MPs to support a bill which modifies the Brexit deal he signed with the EU in January.
The PM said the Internal Markets Bill would "ensure the integrity of the UK internal market" and hand power to Scotland and Wales.
He also claimed it would protect the Northern Ireland peace process.
Critics say the move will damage the UK's international standing after a minister admitted the plans break international law.
The Scottish government has not ruled out legal action to prevent it becoming law.
Scotland's First Minister Nicola Sturgeon said: "The Tories' proposed bill for a so-called UK internal market is an abomination. It is a naked power grab which would cripple devolution."
The Taoiseach (Ireland's prime minister) Micheál Martin has spoken to Mr Johnson "in forthright terms" about "the breach of an international treaty, the absence of bilateral engagement and the serious implications for Northern Ireland", the Irish government said.
Cabinet Office Minister Michael Gove will hold emergency talks in London on Thursday with EU Commissioner Maros Sefcovic to discuss the contents of the bill.
The European Commission had requested a meeting as soon as possible to clarify what the legislation means for the Brexit deal.
Meanwhile, the latest scheduled round of negotiations on securing a post-Brexit trade deal with the EU are also due to wrap up on Thursday.
Commission President Ursula von der Leyen tweeted: "Very concerned about announcements from the British government on its intentions to breach the Withdrawal Agreement. This would break international law and undermines trust."
Downing Street said the EU Withdrawal Agreement - repeatedly described as "oven ready" by Mr Johnson during last year's general election - contained "ambiguities" and lacked clarity in "key areas".
The PM's spokesman said it had been agreed "at pace in the most challenging possible political circumstances" to "deliver on a decision by the British people".
It had been signed "on the assumption that subsequent agreements to clarify these aspects could be reached", the spokesman added.
Remit of the bill
The new bill sets out rules for the operation of the UK internal market - trade between England, Scotland, Wales and Northern Ireland - after the end of the Brexit transition period in January.
- No new checks on goods moving from Northern Ireland to the rest of Great Britain
- Giving UK ministers powers to modify or "disapply" rules relating to the movement of goods that will come into force from 1 January if the UK and EU are unable to reach an alternative agreement through a trade deal
- Powers to override previously agreed obligations on state aid - government support for businesses
The bill explicitly states that these powers should apply even if they are incompatible with international law.
Ministers say the legislation is needed to prevent "damaging" tariffs on goods travelling from the rest of the UK to Northern Ireland if negotiations with the EU on a free trade agreement fail.
But senior Conservatives have warned it risks undermining the UK's reputation as an upholder of international law.
Former Prime Minister Sir John Major said: "For generations, Britain's word - solemnly given - has been accepted by friend and foe. Our signature on any treaty or agreement has been sacrosanct."
He added: "If we lose our reputation for honouring the promises we make, we will have lost something beyond price that may never be regained."
Labour leader Sir Keir Starmer urged the government to consider "the reputational risk that it's taking in the proposed way forward".
But Sir Keir - who campaigned for a second Brexit referendum - added that the "way forward" now was to get a trade deal, adding "if you fail to get a deal, prime minister, you own that failure".
"The outstanding issues are not difficult. They can be resolved. So what I say to the prime minister is, you promised a good deal, get on, negotiate it," he added.
"That's what's in the national interest and focus then on the issue in hand which is tackling this pandemic."
In the withdrawal agreement with the EU, Northern Ireland is still in the UK, but it has to follow elements of the EU's customs code.
This bill will be seen by the EU as a pretty brazen attempt to override the deal that has been done.
The bill contains the words "notwithstanding" - that basically means this law sets aside a law we have already agreed.
That was described to me earlier in the week as being a completely nuclear option.
And they have pressed it.
This row isn't going to go away.
The Democratic Unionist Party, which has been pressing for changes to the Withdrawal Agreement, said the bill was a "step forward" but the government must ensure Northern Ireland is not "restrained in a state aid straight jacket unlike the rest of the UK".
But the deputy first minister of Northern Ireland, Sinn Fein's Michelle O' Neill, said the Withdrawal Agreement protected the Good Friday Agreement and it was "astounding" the UK government "thinks its fine" to wreck an international treaty they had signed up to.
Speaking at Prime Minister's Questions, Mr Johnson said: "My job is to uphold the integrity of the UK but also to protect the Northern Ireland peace process and the Good Friday Agreement.
"And to do that, we need a legal safety net to protect our country against extreme or irrational interpretations of the Protocol, which could lead to a border down the Irish Sea, in a way that I believe would be prejudicial to the interests of the Good Friday Agreement and prejudicial to the interests of peace in our country. And that has to be our priority."
Commenting on a similar argument by Health Secretary Matt Hancock, a former minister told the BBC: "I cannot allow anyone to get away with saying the government is doing this to protect the peace process. This does the precise opposite."
The legislation will see Scotland, Wales and Northern Ireland handed powers in areas such as air quality and building efficiency currently regulated at EU level.
It will also set up a new body - the Office for the Internal Market - to make sure standards adopted in different parts of the UK do not undermine cross-border trade.
The Scottish government fears the UK single market will cut across areas that are usually devolved.
For example, if the UK government decides some food imports are acceptable in England then they would also be allowed in Scotland, even though agriculture is devolved.
The new body will be able to issue non-binding recommendations to the UK Parliament and devolved administrations when clashes emerge.
The SNP's leader at Westminster, Ian Blackford, described the Internal Markets Bill as "nothing short of an attack on Scotland's parliament and an affront to people of Scotland".
Mr Johnson said the bill would protect jobs and growth - and was a "massive devolutionary act" that would represent a "very substantial transfer of power and sovereignty" to Scotland and Wales.
But his words did not prevent the resignation of a senior Conservative in Wales, where the party is in opposition.
David Melding, shadow Counsel General, said in his resignation letter that the PM's actions in the past few days had "gravely aggravated" the dangers facing "our 313-year-old Union".