Israel’s opposition leader has warned of “budding fascism” after the parliament passed a law that critics say unfairly targets NGOs funded by Britain and other EU countries.

The controversial bill was passed 57-48 after a heated late night debate in the Knesset and much criticism both in Israel and from foreign countries.

The law requires NGOs that receive more than 50 per cent of their funding from foreign governments to put a special notice on their official publications and declare their funding in meetings, interviews, and emails.

Critics argue that the law is designed to only impact Left-wing NGOs, many of which receive money from Europe and are critical of Israel’s occupation of the Palestinian territories.

Right-wing NGOs often also receive money from abroad but the donations come from individuals rather than governments, meaning the law will not apply to them.

"The NGO law… is indicative, more than anything, of the budding fascism creeping into Israeli society,” said Isaac Herzog, the leader of the Israeli Labour Party.