The Polish parliament will decide on Thursday whether to adopt some of Europe's strictest rules on developing wind farms amid expectations of backtracking on a proposal that had aimed to double existing capacity.

Relaxation of zoning rules on wind farm investment is also a milestone Poland has to pass to unlock billions of European Union recovery funds.

Present rules have practically blocked land for investment in new turbines since 2016, when the ruling Law and Justice party mandated that a turbine should be a minimum distance of 10 times its height away from residential buildings.

After years of consulting with the onshore wind investors, the government last year proposed to reduce that minimum distance to 500 meters in a bid to spur investments and tabled it in parliament to unlock the EU funds.

Last month, the ruling majority amended it higher again to 700 meters, without presenting an impact assessment of the change.

The change is holding back wind power potential in Poland and potentially exposes its economy to a competitive disadvantage, companies including Google, Mercedes, IKEA, Amazon, Siemens and Bosch said last week.

The amendment will slash potential onshore wind investments by 60-70%, effectively discouraging them, according to the Polish Wind Energy Association, which groups some 150 investors.

As a result at most 4 gigawatts of new capacity will be built this decade, instead of over 10 gigawatts, think thank Ember said in an analysis. Without more wind capacity, Poland could face blackouts as some coal-fired power plants need to be phased out in 2025, according to Ember. (Reporting by Marek Strzelecki; Editing by Kim Coghill)