On Tuesday, over 40 companies issued an open letter threatening to boycott Brazilian products if the bill - seen by some as contributing to deforestation in the Amazon rainforest - passes.
(New throughout, adds delayed vote)
By Jake Spring and Maria Carolina Marcello
BRASILIA, May 20 (Reuters) - Brazil's lower house of Congress on Wednesday delayed voting on a land bill seen by some as contributing to deforestation in the Amazon rainforest, which has dozens of European companies threatening to boycott Brazilian exports.
The bill allows squatters on public land to more easily receive deeds to their properties, a policy that environmental advocacy group Imazon warns will accelerate deforestation of up to 16,000 square kilometers in the world's largest rainforest by 2027.
Congressman Rodrigo Agostinho, leader of the environmental caucus, told Reuters the bill that was slated for a vote on Wednesday had subsequently been removed from the day's agenda.
On Tuesday, over 40 companies including major supermarket Tesco and Burger King UK, issued an open letter threatening to boycott Brazilian products if it passes.
Brazilians have been settling the Amazon rainforest for decades, but many lack official deeds, putting them in a legal gray area. Proponents of the bill say granting deeds to settlers will encourage them to comply with laws to curb deforestation.
Environmentalists oppose putting the bill to a vote, saying it will reward illegal land grabbers, who often deforest land to increase its value for agriculture.
"Today the majority of Amazon deforestation is happening on public land," said Agostinho, who also chairs the lower house's environment committee. "We will keep fighting (the bill)."
The legislation has been considerably diluted since it was initially proposed by right-wing President Jair Bolsonaro, in a move to please farmers, who overwhelmingly supported his 2018 election.
Congressman Marcelo Ramos, coordinator for the bill, said it had been headed to a vote on Wednesday but there is now an impasse as parts of the Bolsonaro government think the proposal no longer goes far enough.
The latest version would fast-track deeds for land settled until 2008 with areas up to roughly 6.6 square kilometers, although the size varies by municipality, according to Richard Torsiano, a former official at the land rights agency Incra.
That is down from up to 16.5 square kilometers in the initial proposal. Lawmakers also removed an earlier provision making more recently settled properties eligible for deeds. (Reporting by Jake Spring and Maria Carolina Marcello; Editing by Steve Orlofsky and David Gregorio)
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