The Spanish judge who made headlines around the world for pursuing foreign dictators from his court in Madrid has spoken out against his government's move to limit cross-border justice, and warned that the proposed changes are part of a wider step backwards on human rights in Spain.

Spanish MPs voted on Tuesday to usher in a fast-track reform that would drastically impede judges from investigating crimes outside of Spain's borders.

For nearly two decades, Spanish judges have used the doctrine of universal jurisdiction to investigate human rights abuses in countries including Guatemala, Chad and Argentina.

Most famously, the Chilean dictator Augusto Pinochet was arrested in London in 1998 on the orders of the Spanish judge Baltasar Garzón. Pinochet was eventually returned to Chile for medical reasons, but Garzón's actions were credited with sparking a revolution in international justice.

The reform introduced last month by Spain's governing People's party stipulates that universal jurisdiction will now only be applied when the defendant is a Spanish citizen or a foreign national resident in Spain. The reform is expected to be passed within months, after which interest groups will no longer be allowed to bring cases forward, only public prosecutors.

In an interview in his office in central Madrid, Garzón described the government's reform as absurd. Judges would not be able to investigate foreign crimes against humanity, genocides and war crimes, he said. "The conditions that they're imposing are so exorbitant that it would be almost impossible to prosecute these crimes."

The changes come just as the Spanish government faces a backlash from China over the use of universal jurisdiction. This week a Spanish court ordered Interpol to issue arrest warrants for five Chinese leaders, including the former president Jiang Zemin, citing their responsibility for alleged human rights abuses in Tibet decades ago.

The arrest orders put the Spanish government – which was looking to bolster the country's fragile economic recovery through increased trade with China – at loggerheads with its own judicial system. "The economic crisis has put us in a dire situation," said Garzón, "but I don't believe the solution to all of our problems lies in negotiating with China and not demanding that they comply with human rights standards."

He bristled at the thought of prioritising economic gain over human rights. "These are the principles on which civilisation is built," he said. "Sometimes upholding and maintaining the principles of dignity for human beings comes at a cost."

One of Spain's best-known judges, Garzón's career has been celebrated and controversial. His judicial career in Spain ended two years ago when he was convicted of illegally ordering the wiretapping of conversations between defence lawyers and clients in a corruption case involving the People's party.

He was banned from the bench for 11 years, on top of a previous suspension in 2010 for investigating the killing of 114,000 people during the Franco regime. A 2012 rally for his reinstatement to the bench drew a crowd of more than 10,000 people, many of whom interpreted his suspension as a punishment for tackling vested interests.

The 58-year-old now heads the legal counsel for WikiLeaks as well as FIBGAR, a foundation in Madrid dedicated to promoting human rights. His institution was one of 17 organisations that signed a letter this week urging the government to abandon its reform of universal jurisdiction. "It's like talking to a wall. They're deaf, mute and blind to our protests," Garzón said of the government's response.

The government has defended the reform. Alfonso Alonso, a People's party spokesman, said universal jurisdiction "promises a lot but leads to nothing more than diplomatic conflicts".

In his aggressive use of the doctrine to investigate human rights abuses in countries ranging from Rwanda to Argentina, Garzón saw universal jurisdiction as having preventive value, serving as a "warning to dictators and oppressors around the world that somewhere there will be a judicial response to their actions".

He pointed out that the reform could also have ripple effects inside Spain, as it would hinder investigations into organised crime and terrorist organisations that are active in Spain but whose leaders reside in foreign countries.

When considered in context with the other laws being pushed by the Spanish government, Garzón said, a worrisome pattern emerged. "We are moving backwards in terms of human rights," he said, pointing to proposed legislation that would roll back abortion law by restricting access and impose fines of up to €30,000 (£25,000) for protesting without permission. "This step backwards is not good for Spain's image on the world stage. We're becoming something very vague and very strange."

He was quick to answer where the change was coming from. "It's a question of ideology put forward by the People's party." He sat back for a moment, considering his next words carefully. "It's like we have a type of Tea Party that's taking us back to a place we overcame a long time ago."