The proposed EU Working Time Directive bans people from working more than 48 hours a week, raising the possibility that the district could lose the on-call firefighters who make up roughly 50% of staff.
Lancashire Fire service spokesman John Taylor said: “The legislation is that people can only work 48 hours a week.
“A typical retained firefighter may work as, say an electrical contractor for 40 hours a week and then be on the pager 80 hours a week and have the permission of his employer to leave work when he is needed
“So he may be working 120 hours a week which would be in breach of the legislation and would leave us completely stretched.
“We would have to close down the retained firefighters and either replace them with full-time officers or just not have that cover. Or we could go to the council tax payer and say we need however many tens of million more which wouldn't be possible.
“We would have to say to people either pay the increased cost or accept the decrease in cover.
“It could mean reduced firefighters in the area.
“The legislation is designed to prevent workers being exploited but if you spoke to retained firefighters they wouldn't say they were exploited they would say they are doing what they want to do and doing something for their community.”
Mr Taylor added that negotiations are ongoing on the directive.
“I want to stress that this is a'what if' at the moment and we're confident the legislation won't be introduced.
“It looks like there will be an opt out for the emergency services because it is a dilemma.”