There was widespread condemnation from around the world today of an Iraqi court ruling fining the Guardian for reporting criticism of the country's prime minister, Nouri al-Maliki.

A broad range of leading journalists, Iraq experts, civic society activists and former officials involved in Iraq's postwar reconstruction said the ruling and fine – for an article quoting intelligence officials as saying Maliki was becoming increasingly authoritarian – reflected a marked decline in press freedom in Iraq.

The article was written by Ghaith Abdul-Ahad, an award-winning Iraqi staff correspondent for the Guardian.

Bill Keller, editor of the New York Times, said: "This ruling has to send a shiver up the spine of anyone who hopes for a genuinely democratic Iraq. What the court calls libel is, in most countries, called journalism.

"Indeed, if a respected journalist like Ghaith Abdul-Ahad can be punished for reporting on concerns about a trend toward authoritarian government, the verdict would seem to lend credence to those very concerns."

Maliki's Dawa party issued a statement today denying that the prime minister had been behind the court ruling over the April article, claiming that the case had been brought by the Iraqi national intelligence service (INIS) without prompting from the political leadership. The statement also insisted that Iraq's judiciary remained independent. But many commentators ridiculed the idea that INIS would act without the prime minister's approval and pointed out that the court awarded damages in the case to Maliki.

Another American journalist who has written extensively about Iraq, Seymour Hersh of the New Yorker, said: "The notion that the newly organised government of Iraq would not understand the basic tenets of press freedom makes a mockery of the sacrifice of the soldiers and the journalists who have lost their lives or been injured doing their jobs there."

Peter Galbraith, a former US ambassador and adviser to the Iraqi Kurd leadership, described Abdul-Ahad's article as "an important story about Iraqi prime minister Maliki's efforts to create an intelligence service loyal to him personally and to concentrate power in his own hands at the expense of his partners in parliament and government.

"The Iraqi government's response in effect affirms the main points of the story as well as raising troubling issues about freedom of the press in Iraq six years after the US and Britain invaded Iraq with the goal of building democracy in that country."

Andy Bearpark, a British expert on post-war reconstruction who was director of operations and infrastructure in the US-led coalition provisional authority in Iraq after the fall of Saddam, agreed that the squeeze on media freedom in Iraq called into question the democracy that the war had ostensibly been fought to build.

"Freedom from tyranny, and the freedom of speech which underpins it, was the reason so many people, Iraqi and others, tried so hard and suffered so much after Saddam was removed in 2003. It is a tragedy to see their efforts undermined in this way," said Bearpark, who is now head of the British Association of Private Security Companies.

The Baghdad court delivered its judgment on Tuesday, ignoring expert testimony from three senior members of the Iraqi journalists' union that Abdul-Ahad's article was not defamatory. The Guardian has said it will appeal against the verdict.

The New York-based Committee to Protect Journalists expressed disappointment at what it called the "politicisation of the Iraqi judiciary". Its Middle East and North Africa co-ordinator, Mohamed Abdel Dayem, said: "That the courts would devote their time to this type of irresponsible suit is outrageous considering that scores of journalist murders remain unpunished. It is vital that this decision be reversed in the appeals process."

Abdel Bari Atwan, editor of the Arabic-language newspaper al-Quds al-Arabi, described the tribunal that delivered the verdict as a kangaroo court.

"It is an affront to the legal system and freedom of expression," he said. "Despite the fact that the Americans spent $800bn to create a democracy and promote freedom of expression, what we have seen in Iraq is an appalling media where the opposition points of view rarely surface. It is sectarian or factional or financed by the Americans."

John Owen, a professor of journalism at City University in London, said the ruling "makes a mockery of any claims of a new democratic Iraq".

He added: "If prime minister Maliki and his government resort to this legal strong-arming after the Guardian publishes a well-sourced story, what will it do to an Iraqi Anna Politkovskaya or international journalist who does even more critical reporting and commentary? This legal chill must be challenged by all press rights groups and concerned news organisations with reporters covering Iraq."

Some commentators went as far as to compare Maliki's behaviour to the rule of Iraq's former dictator. Patrick Cockburn, a journalist and the author of three books on Iraq, said: "This means we're halfway down the road to the end of the free press in Iraq, which was one of the few gains from the overthrow of Saddam Hussein. And what makes this so menacing is that not even Saddam tried this ploy [of suing for defamation in the courts] to stifle reporting on Iraq, which after all said far ruder things about him than has been said about Maliki."

Mamoun Fandy, an expert on the Gulf at the International Institute for Strategic Studies, said the comparisons to Saddam were misplaced.

He said: "It is new that a leader or an intelligence agency in that part of the world takes a journalist in their jurisdiction to court instead of jailing him or ordering him being bumped off."