The European parliament has voted to trigger the EU’s most serious disciplinary procedure against Hungary, saying the country’s government poses a “systematic threat” to democracy and the rule of law.

The vote was carried with the support of 448 MEPs, narrowly clearing the required two-thirds majority, after Hungary’s prime minister, Viktor Orbán, was abandoned by many of his allies in the centre-right European People’s party (EPP).

The outcome heightens the prospect of a split in the EU’s dominant centre-right bloc – to which the German chancellor, Angela Merkel, also belongs – that has been riven by divisions over migration and the future of Europe.

It also reveals the isolation of British Conservative MEPs, who sit in a rival centre-right group and voted with Orbán’s Fidesz party.

Tory MEPs had said triggering the disciplinary procedure for member states seen as at risk of breaching basic democratic values would be counterproductive and would set a dangerous precedent.

It is the first time the legislature has triggered an article 7 procedure against an EU member state. The most severe punishment under article 7 is stripping a country of its voting rights in the EU.

The Dutch MEP who led the process, Judith Sargentini, was given a standing ovation as the result was announced.

“The Hungarian people deserve better,” she said. “They deserve freedom of speech, non-discrimination, tolerance, justice and equality, all of which are enshrined in the European treaties.”

The Hungarian foreign minister, Péter Szijjártó, called the vote “petty revenge” against his country’s tough anti-migration policies.

The vote involved “massive fraud”, he claimed, since abstentions weren’t counted into the final tally, which made it easier to reach the needed majority.

Sargentini said the parliament’s legal service had authorised the counting method, saying such arguments reflected “a very sore loser”.

The Hungarian government’s response was prefigured in a forceful speech by Orbán on the eve of the vote, where he told MEPs that his country was being targeted for choosing not to be “a country of migrants”, and dismissed charges of corruption.

Since Orbán returned to power in 2010 his government has introduced measures to curb judicial independence and increase control over the media, and imposed restrictions that could lead to the closure of the Central European University (CEU). Charges detailed by a slew of international observers, from the United Nations to the Council of Europe, formed the basis of the report by the European parliament.

The European parliament also raised concerns about corruption, as well as alleged misuse of EU funds by Orbán’s son-in-law.

In a sign of his anger towards the EPP leader, Manfred Weber, Orbán accused his European allies of a double standard on the CEU, claiming academic restrictions were stricter in Weber’s native Bavaria.

He claimed the EPP was “dancing to the tune” of socialists and liberals. “We have a different view on Christianity in Europe, the role of nations and national culture. Even differences on the essence of the family, and we do have radically different views on immigration,” he said. “These differences cannot be a reason to brand any country and be excluded from joint decisions.”

The parliament’s report called on EU member states to come up with “appropriate measures to restore inclusive democracy, the rule of law and respect for fundamental rights in Hungary”.

The vote is only the start of a long, drawn out process where the outcome is unclear. Under the article 7 procedure, the assent of four-fifths of EU member states is needed to issue the first formal warning. The next step requires unanimity, and a mutual defence pact between Hungary and Poland could scupper further action, diminishing the chances of the so-called “nuclear option” – the loss of voting rights.

Hours before the vote, the president of the European commission, Jean-Claude Juncker, swung his weight behind the EU’s sanction process. “We continue to be very concerned by the developments in some of our member states,” Juncker said in his annual state of the union speech, which was partly overshadowed by the vote. “Article 7 must be applied whenever the rule of law is threatened.”

Critics of the process in Hungary and abroad have argued that the EU was handing Orbán a propaganda victory by feeding his narrative that Hungary’s way of life was under attack.

Daniel Dalton, a British Conservative MEP, accused the parliament of overstepping its powers with the report. “MEPs have no role to play in the process and their involvement leaves any subsequent legal action open to the accusation that it is politically motivated,” he said.