Israel is to stop issuing birth certificates to babies born to foreigners – a move targeted at migrants but will also encompass diplomats and other international workers. The absence of official documentation is likely to cause major problems when applying for passports and other identity papers.

The plan was disclosed in state papers filed to the high court on Monday in response to a challenge to an existing policy of refusing to include the father's name in foreigners' birth certificates. As part of this policy, Israel also insists that only the mother's family name may be documented as the baby's last name.

The Israeli government says it has no legal obligation to issue official birth certificates to foreigners, and intends to stop doing so to prevent foreigners using such documentation to claim the right to stay in the country. Instead, foreigners will be given hospital-issued birth notices, which are currently hand-written in Hebrew.

A legal challenge, due to be heard on Sunday, has been brought by the Association of Civil Rights in Israel (ACRI) and two other rights groups on behalf of a family of asylum seekers from the Democratic Republic of Congo. A child born to parents with permission to stay in Israel and in possession of work permits was denied a birth certificate including the father's name. The ministry of interior also refused the parents' request to give the child her father's last name.

Israel says including the father's name on an official document without proof of paternity has significant legal ramifications. "Determining paternity is liable to determine the status of the father and child in civil law on matters such as inheritance, child support, custody, conversion, names, citizenship, residency, registration in the population registry and more," according to the court papers.

Amid rising public hostility, the Israeli government has sought to impose severe restrictions on the rights of migrant workers and asylum seekers, which it terms "infiltrators". On Sunday, the cabinet approved a bill to hold all migrants – mainly from Sudan and Eritrea - in a detention centre for a year.

Restrictions on birth certificates have also affected diplomats and other international workers. One western diplomat was barred from being named as his children's father on their birth certificates, and from giving them his family name.

The existing policy was a "hassle rather than a catastrophe" for international staff with well-established support networks, but the new plan was "a step of quite serious concern," he said.

"If Israel is going to stop giving birth certificates to foreigners, it will be a serious problem for all of us – and much worse for someone who doesn't have the infrastructure of support we enjoy." Israel would face "a chorus of concern", he added.

Oded Feller, a lawyer with ACRI, said: "The state has an obligation to protect the identities of all the children in Israel equally. It is also obligated to grant all children, without discrimination, birth certificates. The interior ministry is not authorised to erase elements of a child's identity. It is not entitled to cancel the parenthood of fathers who are not Israeli, nor is it authorised to take away the names given to children by their parents."

A refusal to issue any birth certificates to foreigners would present many difficulties, he added. "Israel's purpose is very simple: they don't want foreigners to apply for legal status here. The ministry of interior wants to make it as hard as possible."

The issue was raised at the United Nations committee on the rights of the child in June. According to minutes of the meeting, the committee "received information that the children of migrants were not issued with official birth certificates, but were instead given a copy of a handwritten birth notification that did not have a personal identification number and did not even include the name of the father. It was reported that families that insisted on the inclusion of the father's name had to pay nearly $2,000 for a DNA test."

The UN convention on the rights of the child, which Israel has signed, says full birth records are a fundamental right.