WASHINGTON - Companies that use derivatives to hedge their risk are set to make a last-ditch effort on Wednesday to persuade Congress to weaken legislation regulating the opaque $450-trillion private swaps market.

Large companies that use derivatives -- also known as end users -- have only a few days left to voice complaints as a House committee has tentatively scheduled a three-day bill drafting session for next week, where it is likely to vote on the new derivatives rules.

The Obama administration and regulators are pushing reforms to remove risks from the derivatives market, after a type of derivatives known as credit default swaps nearly toppled insurer AIG Inc and wreaked havoc on the global financial system.

The House Financial Services Committee already has exempted some derivative swaps from processing by a central clearinghouse, which assumes the risk if one party defaults.

The committee also moved away from early plans to curb speculation in the $39 trillion credit default swaps market and prohibit investors from speculating on a borrower's credit worthiness.

The draft bill recognizes that many companies use derivatives for managing risk and does not require the use of only cash as collateral on customized derivatives, an issue for larger companies.

We are concerned that regulators will be ceded too much authority to determine what companies are subject to regulatory thresholds, Steven Holmes, director of treasury operations at Deere & Co told Congress in prepared remarks.

Deere, the world's largest maker of tractors and harvesters, also told the House committee that it was concerned about the capital requirements.

We believe that capital charges should be levied solely based on actual risk of loss and not as a means of forcing companies to centrally clear transactions, he said.

Cargill, a provider of food and agriculture products, echoed Deere's concerns on giving regulators discretion to impose capital and margin requirements.

Capital requirements should clearly recognize and reflect the internal risk management processes utilized by dealers, Jon Hixson, Cargill's director of government relations, said in prepared remarks to the panel.

The financial services panel is holding a hearing on Wednesday to examine the draft bill authored by its chairman Barney Frank.

The legislation splits oversight of the swaps market between the Securities and Exchange Commission and the Commodity Futures Trading Commission, which could allow market participants to shop for the weakest rules.

The SEC is expected to tell Congress on Wednesday that parts of swaps market could still fall through regulatory cracks under Frank's draft bill.

(Editing by Padraic Cassidy)