Home Secretary David Blunkett is working on proposals for a law that could be introduced in the Queen's Speech next month.
Insiders claim he originally planned to make board directors responsible for corporate killing. This would have seen senior members of staff sent to jail if they were proved negligent in any way following a fatality.
But the Financial Times claimed the proposed law had already been rewritten to focus on companies, rather than managers or directors.
A Home Office spokeswoman dismissed the claim, saying: 'We are still consulting, but we are committed to changing the law.'
John Monks, general secretary of the Trades Union Congress, said the legislation could mark a sea change in health and safety at work and claimed directors were still under the spotlight.
He said: 'It will be easier to convict directors who have caused someone's death. That is the basic accountability that the TUC and victims' families are campaigning for. Sensible employers have no reason to object to that, or fear it.
'What they would be right to reject, and what trade unions have not asked for, is the automatic blaming of a particular director just because of his title, such as safety director. We do not want scapegoats. We want accountability.'
Nigel Rolfe, head of sales and marketing at ARVAL PHH Accident Management, said the latest debate hammered home the importance of companies taking health and safety seriously.
He added: 'It is actually the responsibility of the company's top echelon to establish a clear and comprehensive safety management policy that covers all employees, especially occupational drivers.'