Brussels is to launch legal action against the UK as early as Monday, on the publication of draft legislation to rip up large parts of the 2020 Brexit deal, EU officials say, as the two sides edge closer to a possible trade war.

The officials said the European Commission would respond immediately to a British bill to rewrite the so-called Northern Ireland protocol, by restarting a legal process frozen last year to allow negotiations and possibly initiating a second case.

The UK bill, due imminently, would end the oversight role of the European Court of Justice as well as EU control over state aid and value added tax in the region.

The legislation would also break with the Brexit treaty by exempting goods from Great Britain from the need to go through border checks if they stay in Northern Ireland, and give ministers sweeping powers to change almost every aspect of the text.

The EU officials said the UK had already failed to implement large parts of the deal agreed by Prime Minister Boris Johnson. Any case would probably end up at the ECJ, which could impose fines for non-compliance.

If the UK refuses to pay and comply with its judgment, the EU could end parts of its post-Brexit trade deal, applying tariffs to British goods.

Leo Varadkar, deputy prime minister of Ireland, said in an interview legal action was “proportionate” but cautioned against a trade war. “What’s happening here is serious, but there’s a big difference between proposed legislation and actual legislation being enacted and then it actually being used.”

He condemned the UK move as “anti-democratic” because a majority of voters in Northern Ireland back parties that are in favour of the protocol.

Fifty two of the Northern Ireland assembly’s 90 elected members wrote to Johnson on Monday to “reject in the strongest possible terms your government’s reckless new protocol legislation”, accusing him of seeking “to destabilise our region”.

The bill is also likely to anger the US, while ministers privately admit the bill could be blocked for months by the House of Lords.

Johnson denies the legislation breaks international law, arguing it is necessary to protect the 1998 Good Friday Agreement, which brought peace to Northern Ireland after three decades of conflict.

“Our higher and prior legal commitment to the country is to the Belfast/Good Friday Agreement and to the balance and stability of that agreement,” he told LBC Radio on Monday.

The Democratic Unionist party, Northern Ireland’s largest unionist party, has refused to restore the power-sharing agreement in the region after the nationalist Sinn Féin became the largest party in the May elections.

“One community at the moment feels very very estranged by the way things are operating, very alienated, and we just have to fix that, it’s relatively simple to do it,” Johnson said. “It’s a bureaucratic change that needs to be made, frankly it is a relatively trivial set of adjustments in the grand scheme.”

But Sammy Wilson, a veteran DUP MP, said that House of Commons approval of the new legislation would not be enough for his party to return to the region’s government, labelling any bid to push it to do so before the bill proceeds to the House of Lords as “foolish” blackmail. He added that the DUP needed to see the legislation “in its final form . . . before we can give our support to it”.

Johnson also said a trade war between the UK and the EU would be a “gross, gross overreaction”. He added: “All we are trying to do is simplify things, trying to remove barriers to trade to Great Britain and Northern Ireland.”

Under current Brexit arrangements, new checks are needed for goods travelling from Great Britain into the region, which remains part of the EU single market for goods.

But under the new legislation, goods destined to stay in Northern Ireland would go through a “green lane” with no checks, while goods heading across the open border into the Republic of Ireland would face “red lane” checks.

The bill would also create a dual regulatory regime, allowing goods originating in Great Britain to circulate in the region provided they met UK standards, rather than the EU’s.

In response to the legislation, Maroš Šefčovič, the European commissioner for Brexit, is expected on Monday afternoon to ask the commission to refer the paused legal case — on a unilateral UK decision to delay checks on goods and pets — to the ECJ.

A second case, on the new bill itself, would start with a letter to London. Both would probably take more than a year to conclude.