Melchett, policy director at the UK-based pressure group, said that the proposed revision would risk nearly one in a hundred mouthfuls of organic food being GM and impose a generic 'EU-Organic' label on all organic food.
It would also concentrate power in the hands of the EU Commission.
"This draft revision runs completely counter to the spirit of the pioneers of the organic movement, which grew from the grassroots, prioritising local distinctiveness, care for the environment and animal welfare," he said.
"In contrast, the Commission's draft organic regulation mimics the agribusiness model of globally competitive, freely traded commodity production."
Organics is big business. The European market was worth 20.7 billion in 2004, and has been growing by 26 per cent since 2001.
Growing concern about the environmental impact of artificial fertilizers and pesticides has of course been a factor in this, but supermarkets have also been quick to tap into mainstream concerns about the consumption of possibly dangerous chemicals.
But the biggest growth area for organic food, according to the Soil Association, is via direct sales. Box schemes and farmers' markets sales grew by 16 per cent over 2004-5 compared to 9 per cent for organic sales in supermarkets.
Now new proposed laws could undermine the fundamental factors behind the sector's growth.
Article 3 for example suggests economic viability of a production system rather than the interests of human health or environmental sustainability as the criteria for judging its acceptability. Melchett claims that the draft proposal also sets the weak goal for organic production of only minimising negative effects on the environment rather than delivering positive environmental outcomes.
"Proposing that organic food standards should allow routine contamination with GM might please Monsanto, but flies in the face of the widespread public opposition across all EU Member States to this controversial technology," he said.
The draft proposal allows for 0.9 per cent adventitious contamination with GM equivalent, according to Melchett, to almost one in 100 mouthfuls of organic food being completely GM while still being sold as organic produce.
The Soil Association's legal opinion is that the current regulation requires no use of GM in organic farming and food.
Despite the recent WTO ruling that any moratorium on GM food is illegal, widespread consumer rejection of GM products will likely mean that the technology remains untouchable for many manufacturers and retailers. It is clear that Member States still need to be convinced that introducing genetically modified ingredients into food production is acceptable.
The implications for labelling are another concern for Melchett.
"There's no doubt that the regulation needed bringing up to date, given the huge surge in public support and market growth since the original was drafted in 1991. But imposing a meaningless, generic 'EU-Organic' label will put the Commission into conflict with those who could be its strongest supporters.
"Consumers want to buy locally sourced organic sausages supporting Norfolk, Cumberland, or Schleswig-Holstein producers not some anonymous 'Euro-organic sausage'."
Melchett claims that Article 18 forces every organic product to carry an EU logo or to say it is 'EU-organic', obscuring local origin and undermining consumers' ability to choose local food.
The Soil Association's concerns have been submitted as a formal response to the Defra consultation on Proposal for a Council Regulation replacing Council Regulation 2092/91 on Organic Production.