The collapse of the Belgian government has thrown into doubt plans to pass a law that would ban Islamic veils in public.

The government, led by the prime minister, Yves Leterme, fell after the centre-right Flemish liberal party Open VLD pulled out of his five-month-old coalition. Leterme tendered his government's resignation to King Albert after an emergency cabinet meeting, but the monarch did not immediately decide whether to accept it.

"I doubt that they will debate this law as they have other things on their minds," said a Belgian official in London.

MPs had been expected to pass a law today that would have made Belgium the first European country to ban the wearing of the burqa, which covers the face and body, or the niqab, which covers the face.

The bill, which has been criticised by human rights campaigners as a violation of the fundamental right to freedom of religion, was approved unanimously by the lower chamber's home affairs committee last month.

The law would make it a crime to be in a public place with one's face partially or wholly concealed in a way that would make identification impossible. Violators would be subject to a fine of €15-€25 (£12-£21) with a possible prison sentence of one to seven days.

There are no official statistics on how many women wear face-covering veils, though analysts agree it is a marginal phenomenon among the roughly 400,000 Muslims living in Belgium (about 4% of the country's population). In 2009, 29 women were stopped by police in eight municipalities in the Brussels region that already ban the full Muslim veil.

A similar move is being considered in France, where President Nicolas Sarkozy has ordered legislation paving the way for a total ban on the full Islamic veil. Sarkozy is moving ahead on the ban despite the advice of experts who warned that such a broad ban risked contravening France's constitution.

Sarkozy has repeatedly said that such clothing oppresses women and is "not welcome" in France. A government spokesman, Luc Chatel, said after yesterday's weekly cabinet meeting that the president decided the government should submit a bill to parliament in May on an overall ban on burqa-like veils.

"The ban on veils covering the whole face should be general, in every public space, because the dignity of women cannot be put in doubt," Chatel said.

The decision to seek a full ban, rather than a limited ban, came as a surprise. After a cabinet meeting a week ago the government spokesman announced a decision for legislation that bans the veil but takes into account conclusions by the council of state, France's highest administrative office.

The council advised that a full ban would be "legally very fragile". A six-month parliamentary inquiry concluded that a full ban would raise constitutional issues, as well as enforcement problems.

Muslim leaders in France say that the face-covering veil is not a religious requirement of Islam but have cautioned against banning the garment. Of France's estimated 5 million Muslims, only a tiny minority wear the full veil. Some critics of the ban have warned that such a move will serve merely to reinforce the alienation of those women from mainstream society.

Human Rights Watch has strongly criticised planned legislation to ban face-covering veils on human rights and practical grounds.

"Bans like this lead to a lose-lose situation," said Judith Sunderland, senior western Europe researcher at Human Rights Watch. "They violate the rights of those who choose to wear the veil and do nothing to help those who are compelled to do so."

The group argues that there is no evidence that wearing the full veil in public threatens public safety, public order, health, morals, or the fundamental rights and freedoms of others – the only legitimate grounds for interference with fundamental rights, it said. Rather than help women who are coerced into wearing the veil, a ban would limit, if not eliminate, their ability to seek advice and support.

Without the support of the centre-right Open VLD, the remaining four parties in the Belgian government still had 76 of the 150 seats in the lower house of parliament but the coalition would have found it hard to rule with such a slim majority.

Open VLD said it had lost faith in the government, composed of centre-left and centre-right parties, because it had failed to resolve a dispute between French- and Dutch-speaking parties over electoral boundaries around the capital, Brussels.