Government says move is needed to reduce overcrowded prisons, but opposition allege it will set back anti-graft drive.
Thousands of Romanians have protested against government plans to grant prison pardons and decriminalise some offences through emergency decrees that could weaken an anti-corruption drive.
In the capital, Bucharest, about 3,000 people carrying signs that say "We see you" and chanting "In a democracy, thieves stay in prison" marched toward the government building on Wednesday.
The government, which took office after a December parliamentary election, has cited a need to get the criminal code in line with recent constitutional court rulings.
It has also said granting pardons would help ease the burden of Romania’s overcrowded prisons.
Prime Minister Sorin Grindeanu wants to implement the measure through an emergency ordinance which would bypass parliament and would not require the president’s signature
Critics have raised concerns about legislating via decree rather than going through parliament, where the government has a solid majority but would face a challenging debate. Decrees come into effect immediately.
Earlier on Wednesday, President Klaus Iohannis urged ministers not to amend the criminal code via decree and sought to ease concerns about backsliding on commitments to tackle corruption.
"There are two elephants in the room and no one is talking about them: the emergency pardoning decree and the decree that changes criminal codes," Iohannis, a centrr-right leader, said at the start of the cabinet meeting.
"I stress that ... the prime minister is committed not to introduce such issues overnight at any government meeting."
The drafts of the decrees showed an intent to pardon convictions of less than five years for several crimes. The government also aims to decriminalise abuse of power that has caused budget damage of less than $47,522.
The proposal could affect 2,500 prisoners.
Prisoners over 60, pregnant women and inmates with young children would see their sentences halved, regardless of their conviction.
Judges, the prosecutor general and chief anti-corruption prosecutor have all criticised plans to amend criminal legislation without consulting the judiciary.
Abuse of power accounts for a third of anti-corruption investigations. Ruling Social Democrat Party leader and parliament lower house speaker Liviu Dragnea is currently on trial in an abuse of power case. He is also serving a two-year suspended jail sentence in a vote rigging case.
The European Commission keeps Romania’s legal system under special monitoring.
It has praised magistrates’ efforts to fight widespread graft, but noted Romanian politicians have a history of trying to pass legislation to weaken investigative powers.
Grindeanu, the prime minister, told reporters the two decrees were not on the agenda this week, but that they could be once the judiciary is consulted.
"It is just as constitutional as the president attending a government meeting for us to issue emergency decrees in all areas that the law allows us to," he said.
Raluca Turcan, leader of the opposition Liberal Party, accused the government of trying to sneak the measure in. She called it "an abuse of trust, an act that favors the criminal, an act against the general public".
Media mogul Dan Voiculescu, a government supporter, is another possible beneficiary of the proposal. The 70-year-old is currently is serving a 10-year sentence for money laundering.