WASHINGTON - The House approved a bill last night to create a vast new department to protect the nation from terrorist attacks, in what would be the broadest reshuffling of the federal government in decades.

The Republican-controlled House passed the measure on a vote of 295-132.

The measure closely resembles the proposal that President Bush unveiled last month in calling for a new Cabinet-level Homeland Security Department, which would include 170,000 employees. But attention now shifts to the Senate, where Democrats have written a different version of the bill that the president has threatened to veto in its current form.

The president is locked in an intensifying battle with Senate Democrats over how much authority the White House should have to suspend labor protections for workers in the new department whose jobs the president deems vital to national security.

The House bill grants much of the authority Bush had sought to hire, fire and transfer employees. The House rebuffed an effort by Democrats - and Rep. Constance A. Morella, a Montgomery County Republican who represents many federal workers - to block such power as a threat to civil service protections.

"We believe that we have helped to craft a department in this government that will focus the resources of this government on our safety and our security," House Majority Leader Dick Armey, a Texas Republican, said last night.

"Should we have done that ... right, we will look back and say we had a hand in that, and aren't we proud?"

But Rep. Nancy Pelosi, a California Democrat, said: "We have a solemn obligation to those heroes who died as martyrs to freedom, and to their families, to respond in a way that reflects the greatness of our country. I do not think the legislation before us does that.

"We have here a diminution of the right of our work force, rather than an enhancement of our civil service."

The debate is complicating a bipartisan effort to create the new department, which is partly a symbolic display around the one-year anniversary of the Sept. 11 attacks that the government is better equipped to prevent further terrorism.

Earlier yesterday, Bush boldly warned Senate Democrats that he would reject any final legislation that did not grant him the authority to waive some workers' rights.

The White House argues that some union protections could make it too difficult for managers in the new department to hire and fire at will, or to relocate employees quickly, when the nation's safety is at stake.

"A time of war is the wrong time to weaken the president's ability to protect the American people," Bush said, appearing at the White House with Cabinet secretaries, governors, mayors, police officers and firefighters in an effort to pressure Democrats to drop their objections.

"It is important that we have the managerial flexibility to get the job done right. We can't be micromanaged."

Maryland Republican Reps. Roscoe G. Bartlett, Wayne T. Gilchrest and Constance A. Morella supported the bill, while Rep. Robert L. Ehrlich Jr. did not vote.

Of the state's Democrats, Rep. Benjamin L. Cardin voted for the bill, while Reps. Elijah E. Cummings, Steny H. Hoyer and Albert R. Wynn voted against it.

Under the House bill, the Homeland Security Department, in a drastic shift of power, would absorb 22 agencies, including the Coast Guard, the Secret Service, the Border Patrol and the Federal Emergency Management Agency.

The bill heeds the president's call to harness the power and knowledge of private businesses, offering product-liability protections to companies that provide equipment to the government for the fight against terrorism. And the measure would exempt from the Freedom of Information Act some information that companies give the government about terrorist threats.

In an unexpected victory for Democrats, the House voted to bar companies that avoid paying U.S. taxes by moving their headquarters overseas from being awarded contracts with the new department. Most Republicans had opposed that provision, but began favoring it when they saw that it would succeed.

The bill would also extend by one year - until Dec. 31, 2003 - the deadline for airports to install equipment to check airline passenger luggage for bombs.

House Republicans overcame strenuous objections from Democrats over granting the president authority to suspend collective bargaining rights and to prevent employees from belonging to unions at certain times.

Early in the day, the House voted along party lines to approve an amendment crafted by Rep. Christopher Shays, a Connecticut Republican, that gives the president power to waive union rights if he certifies that union membership would hinder the department's ability to protect the nation.

Shays' amendment would make it slightly harder for the White House to bypass labor protections.

Republicans and administration officials said they favored leaving intact most worker protections, including those that protect against discrimination based on age, race or disabilities.

But they stressed that managers in a department whose focus is national security sometimes need to operate free of rules that govern work hours or conditions to move people around quickly.

"The employees in this department will have more protection than the employees in any other department in the federal government," said Rep. Rob Portman, an Ohio Republican, calling Shays' amendment "a sensible compromise."

Among the Democrats' major setbacks was an amendment sponsored by Morella, who is among the most liberal Republicans in Congress. Her amendment would have barred the president from waiving union rights for national security reasons unless the employees were given new duties related specifically to the war on terrorism.

The House rejected Morella's amendment on a 222-208 vote.

"I am a friend of the president," Morella said of Bush, who helped raise $400,000 last month for her re-election campaign. "But on the federal employee issues, his record is not as laudable as I would like it to be. I simply cannot take a chance on being wrong on this issue."

Morella said she would continue her fight as the Senate takes up its measure - possibly next week - and negotiators reconcile the differences between the two bills.

Under current law, when federal jobs are considered crucial to national security, the president may suspend the rights of workers to be in unions and to invoke union appeal processes.

Democrats and other critics, however, say they fear that Bush could disarm unions at will by deeming all employees critical to national security.

Both sides still predict that they can resolve their differences without a veto.

Sen. Joseph I. Lieberman, the Connecticut Democrat who wrote the Senate version of the legislation, appeared at the White House yesterday to meet with Bush in private and attend the event at which Bush spoke about homeland security.

In explaining the White House's veto threat, aides offered examples of how current labor protections for federal workers could hamper efforts to fight terrorism.

Ari Fleischer, Bush's press secretary, said: "If a Border Patrol agent is found to be intoxicated and lets a potential terrorist into the country, he or she cannot be fired without a written 30-day notice and must be paid during that notice period."

Firing back, Lieberman released a "fact sheet" dismissing that and other examples offered by the administration.

"A Border Patrol agent may be removed from the post and suspended immediately without pay, if the agency head considers that action necessary in the interests of national security. Then, after an investigation and review, the agency can fire the employee with no appeal."