EU plans to force multinational companies to be more open about their tax arrangements were hailed by Chancellor George Osborne as "a step in the right direction".

But the proposals won only a lukewarm response from campaigners for tax transparency, who warned they could be "close to useless" unless they were extended to cover the whole world.

Under the scheme, large companies operating in the EU will have to publish the amount of tax they pay in each of the 28 member-states on a country-by-country basis, alongside details of their activities, number of employees, turnover and profits.

And crucially, they will also by required to produce a country-by-country breakdown of levies paid in states on a list of tax havens being drawn up by the EU. Figures for the rest of the world will be produced on an aggregate basis, allowing politicians and members of the public to judge whether the taxes paid in EU countries fairly reflect the proportion of companies' profits made in Europe.

The initiative - launched amid international furore over the Panama Papers leak - is designed to put pressure on companies to pay tax in the countries where they make their money, by making it easier for politicians and members of the public to judge whether they are artificially diverting profits to low-tax states.

Officials in Brussels are understood to be counting on public outrage over the leaks to smooth the introduction of the new measures, as well as agreement on the EU list of tax havens.

The new measure - which could come into effect as early as 2018 - will affect large companies with annual turnover of more than 750 million euro (£600 million), including companies which are not headquartered in the EU but have subsidiaries there. This would cover large US firms like Apple, Starbucks and Google, which have attracted criticism over their tax arrangements.

Mr Osborne said the move followed David Cameron's decision to put tax transparency at the heart of the UK's agenda for its presidency of the G8 in 2013. Britain had already implemented OECD recommendations for country-by-country reporting between businesses and tax authorities, he said.

"This is a great example of the UK winning the argument in Europe," said the Chancellor. "We have led the world in the fight against tax evasion and avoidance.

"The Commission's proposals for public country-by-country reporting released today are a step in the right direction towards new international rules for greater public transparency."

Shadow chancellor John McDonnell welcomed the EU proposals, which he said had been supported by Labour MEPs while Conservatives "were doing their best to block them".

Mr McDonnell warned that "more still needs to be done", adding: "Labour believes that the turnover threshold is far too high and we will be pushing to get this figure reduced to a much lower level so that large corporations find it far more difficult to dodge paying their fair share of tax."

But charities said that allowing "aggregate" figures for tax in much of the world outside Europe would allow big businesses to maintain secrecy over their tax affairs.

Oxfam GB chief executive Mark Goldring said the "piecemeal" proposals would be "close to useless" unless they were extended to cover the whole world, and would not be enough to end "tax dodging which robs the world's poorest people of billions in lost revenue each year".

Christian Aid spokesman Toby Quantrill said the proposals were "a recipe for dodgy business as usual", while Diane Sheard of the One Campaign said: "The only way to fight illegal tax evasion is to disclose full country-by-country reporting which covers the activities of European multinationals everywhere in the world, in line with the existing reporting requirement for European banks."

ActionAid's Diarmid O'Sullivan said the turnover threshold was too high to catch all but the biggest companies, saying: "David Cameron should push for the proposal to be strengthened by ensuring that it covers all large multinationals operating within the EU, and requires them to publish tax payments for all countries where they do business."

The European Commission said the change will not impact on small and medium sized businesses, but will cover an estimated 6,000 multinationals representing 90% of corporate revenues, without imposing a significant administrative burden on them.

Launching the proposals in Strasbourg, European financial stability commissioner Lord Hill said: "Our economies and societies depend on a tax system that's fair, a principle that applies both to individuals and to business.

"Yet today, by using complicated tax arrangements, some multinationals can pay nearly a third less tax than companies that only operate in one country. Our proposal to increase transparency will help make companies more accountable. It will promote fairer competition between companies regardless of their size."

The new proposals are subject to approval by the European Parliament and representatives of national governments in the European Council. A new directive could be agreed later this year, but member states then have a year to transpose it into national law, meaning the first reports are likely to be based on information from the 2018 financial year.