UPDATE 1-Britain to defy EU by scrapping Northern Ireland trade rules

* UK to set out legislation on Monday

* Move risks triggering trade dispute with EU

* EU says unilateral action will break international law

* Ireland accuses UK of a new low (Adds Irish context)

By Elizabeth Piper and Kate Holton

LONDON, June 13 (Reuters) – Britain will set out plans on Monday to override some of the post-Brexit trade rules for Northern Ireland, scrapping checks and challenging the role played by Brussels in a fresh clash with the European Union.

As Ireland warned of a “new low” from London and Brussels talked of damage to trust, British Prime Minister Boris Johnson vowed to plough ahead, saying the “relatively trivial” steps were needed to improve trade and simplify bureaucracy.

Tensions have been simmering for months after Britain accused the bloc of taking a heavy handed approach to the movement of goods between Britain and Northern Ireland – checks that were needed to keep an open border with EU-member Ireland.

Always the toughest part of the Brexit deal to crack, the situation in the region has sent alarm bells ringing in European capitals and Washington, and among business leaders.

It has also heightened political tensions, with pro-British communities saying their place in the United Kingdom is being eroded.

A power-sharing administration has broken down and the Democratic Unionist Party (DUP) said it would only return to parliament if it is sure the bill will become law.

The new legislation comes as the UK faces its toughest economic conditions in decades, with inflation forecast to hit 10% and growth stalling. Johnson said any talk of a retaliatory trade war by Brussels would be a “gross, gross overreaction”.

“All we are trying to do is have some bureaucratic simplifications between Great Britain and Northern Ireland,” he told LBC Radio.

NEW CLASH

Britain has been threatening for months to rip up the protocol, an agreement that kept the region under EU rules and forced an effective customs border between Northern Ireland and the rest of the UK to prevent a back door from opening up into the EU’s vast single market.

Under the legislation, London is expected to introduce a “green channel” for goods moving from Britain just to Northern Ireland, change the tax rules and end the role of the European Court of Justice as sole arbiter.

The bill, which will be presented to parliament by Foreign Secretary Liz Truss, could take around a year to pass. It comes as Johnson seeks to recover from a large rebellion against his leadership by winning back the support of lawmakers, including those who want a tough stance against Brussels.

The legislation, like Brexit itself, has split legal and political opinion, with supporters of the UK’s divorce saying it does not go far enough and critics saying it undermines London’s standing in the world by challenging an international agreement.

Truss told European Commission vice-president, Maros Sefcovic, that London was still open to a “negotiated solution”. He said any unilateral action damaged trust.

Brussels believes any unilateral change may breach international law. It could launch legal action or eventually review the terms of the free trade deal it agreed with Britain.

EU officials have said that Britain will not be allowed to join its 95 billion euro Horizon Europe research programme until outstanding disputes, notably Northern Ireland, are resolved.

U.S. House of Representatives Speaker Nancy Pelosi has also said there will be no U.S.-UK trade deal if London scraps the protocol.

(Additional reporting by Paul Sandle, Andrew MacAskill and Kylie MacLellan; Editing by Louise Heavens, Mark Potter and Ed Osmond)