The Scottish Government will ask Holyrood next month to formally withhold consent to the Internal Market Bill.
Brussels slams UK for 'wasting valuable time' but British side accuses EU of being 'unnecessarily difficult'.
The economy grew by 1.5% in May but it is still down by nearly a quarter compared to February.
The Scottish Government says the decision is taken with a 'heavy heart' and is necessary because of Brexit.
Committee believes UK Environent Bill as it stands would only allow Scottish ministers limited say.
Constitutional relations secretary Michael Russell warned of a 'catastrophic' recession due to Covid-19.
Brussels' chief negotiator Michel Barnier said an extension is available if the UK wants it.
The economy cannot afford the 'double hit' of Covid-19's impact and a no-deal Brexit, Michael Russell warned.
Shadow Scottish secretary Ian Murray said 'this is not a time for constitutional politics'.
The UK Government should seek to extend the transition period to focus on tackling Covid-19, the SNP said.