International observers have delivered a damning verdict on the parliamentary election in Hungary, complaining of “intimidating and xenophobic rhetoric, media bias and opaque campaign financing”.

The vote on Sunday delivered an overwhelming victory for Viktor Orbán, who will now serve a third consecutive term as prime minister. Orbán and his Fidesz party campaigned almost exclusively on a programme of keeping migrants out of the country.

“Rhetoric was quite hostile and xenophobic and that’s a fact which we find regrettable in an electoral context,” said Douglas Wake, the head of the monitoring mission for the Organisation for Security and Cooperation in Europe (OSCE), at a briefing in Budapest on Monday.

The observers found that the hostile campaign “limited space for substantive debate and diminished voters’ ability to make an informed choice”. They also noted that public television “clearly favoured the ruling coalition”.

It is an unusually strong rebuke for elections in an EU country, but given the size of Orbán’s victory and his previous imperviousness to outside criticism, is unlikely to have much effect inside Hungary.

The OSCE’s preliminary report also strongly criticised the use of public funds for so-called “government information campaigns”. The electoral process was “characterised by a pervasive overlap between state and ruling party resources, undermining contestants’ ability to compete on an equal basis”, it said.

With just two weeks to go before the vote, thousands of anti-migrant billboards appeared that were theoretically unrelated to the campaign. They featured a long line of migrants, emblazoned with the word STOP. The same photograph was used in Ukip’s controversial “breaking point” poster during the UK’s Brexit referendum campaign.

Facebook Twitter Pinterest One of the anti-migrant billboards put up during the election campaign in Hungary. Photograph: Leonhard Foeger/Reuters

“Putting up many, many billboards with messages that are almost exactly the same as the ruling party when they’re being financed by the taxpayer is an electoral concern,” said Wake.

Despite the strong criticism from the election monitors, a number of European politicians lined up to congratulate Orbán, including a number of far-right leaders such as Marine Le Pen and Geert Wilders.

Britain’s foreign secretary, Boris Johnson, tweeted: “Congratulations to Fidesz and Viktor Orbán on winning the elections in Hungary. We look forward to working with our Hungarian friends to further develop our close partnership.”

Hungary is seen as one of the only friends Britain has as it continues with Brexit negotiations, leading to an extremely cautious approach to any criticism of Orbán from British diplomats and politicians.

In Brussels, however, responses were more mixed. Manfred Weber, the German leader of the largest party in the European parliament, the European People’s party, of which Orbán’s Fidesz is a member, welcomed the news.

Those comments were immediately denounced by the former Belgian prime minister and leader of the liberal group, Guy Verhofstadt. He tweeted: “By congratulating Orbán without calling on him to respect European values, the EPP legitimises his vile campaign, his attack on the rule of law & attempt to install authoritarianism.”

A spokesman said the European commission president, Jean-Claude Juncker, would write to congratulate Orbán on his clear victory and call him to discuss “issues of common interest”.

He said: “The EU is a union of democracies and values. President Juncker and the commission think that the defence of these values and its principles is a common endeavour of all member states, without exception.”

There is little sign that any words of reproach will have an effect on Orbán, particularly after winning such a convincing mandate.

Four years ago OSCE monitors said the previous parliamentary election was “free but not fair”, and Wake made it clear that the Hungarian government had largely ignored the recommendations contained in that report. “The response to our previous recommendations was extremely limited,” he said.

Many observers believe that rather than the EU changing Hungary, there is a higher probability of a newly emboldened Orbán winning ground in his battle to reshape the EU. Although Orbán’s political language is of the far right, his Fidesz party is part of the centre-right grouping in Brussels that includes Angela Merkel’s Christian Democratic Union party.

Orbán’s new mandate makes it less likely that Brussels will be able to hold him to account over democratic backsliding. András Tóth-Czifra of the European Stability Initiative thinktank said European leaders would now feel there was no alternative to Orbán, which would make it harder to apply pressure and give him more leeway to brush off criticism.

“This in turn will encourage parties like the Front National, Dutch Freedom party, Austrian Freedom party and the AfD [Alternative for Germany] to call for policies like Orbán’s, and cow more and more EPP politicians into adopting these policies themselves,” said Tóth-Czifra.