The European Union is taking legal action against Hungary in a growing confrontation over populist prime minister Viktor Orbán’s drive to curb the influence of organisations funded by liberal philanthropist George Soros.

Mr Orbán accuses the Hungarian-American billionaire of trying to undermine his government and open Europe to uncontrolled immigration, and he has launched a campaign to discredit the Holocaust survivor that some say stokes anti-Semitism.

The EU announced the start of infringement proceedings against Hungary this week over its new law tightening control on foreign-funded NGOs. Brussels also warned that it might soon take similar action over Hungarian education reform that may force the Soros-funded Central European University in Budapest to close.

Mr Orban and his ruling party, Fidesz, refuse to back down, rejecting the concerns in Brussels that the laws breach basic EU rights and freedoms.

“These are organisations that want to weaken Hungary’s defence capabilities in the fight against illegal immigration,” the country’s justice ministry said of foreign-funded NGOs.

“We regard it as extremely revealing that it is precisely those political activist groups that are refusing to conform to the new law and to register that receive a significant part of their funding from George Soros’s network.”

On the education law, Mr Orbán’s chief of staff, János Lázár, said recently: “We, Central European University and Fidesz, peacefully co-existed side by side in the past years. The changes came about when George Soros announced a programme about having to open Europe’s borders and call in a million immigrants a year.”

Praising Russia, China and Turkey, Mr Orbán says he wants to make Hungary an “illiberal state”. He has often clashed with the EU since taking power in 2010, depicting it as a tool of an international liberal elite led by people such as Mr Soros (86).

Poster campaign

In recent weeks thousands of government-funded posters have appeared around Hungary showing a grinning Mr Soros beside a caption saying that 99 per cent of Hungarians oppose illegal immigration and the caption: “Don’t let Soros have the last laugh!”

At least one Budapest tram has posters on the floor by the doors, so passengers step on Mr Soros’s face; some billboards have been defaced with the words “stinking Jew” and other graffiti.

“I am distressed by the current Hungarian regime’s use of anti-Semitic imagery as part of its deliberate disinformation campaign,” Mr Soros said this week.

“Equally, I am heartened that together with countless fellow citizens the leadership of the Hungarian Jewish community has spoken out against the campaign.”

Israel’s ambassador to Budapest, Yossi Amrani, said the poster campaign – which cost an estimated €18 million – “evokes sad memories but also sows hatred and fear”.

The Israeli foreign ministry stepped in, however, saying that “in no way was the statement meant to delegitimise criticism of George Soros, who continuously undermines Israel’s democratically elected governments by funding organisations that defame the Jewish state and seek to deny it the right to defend itself.”

The ministry intervened ahead of next week’s visit to Budapest by Israeli prime minister Binyamin Netanyahu, who shares Mr Orbán’s dislike of criticism from Soros-funded NGOs.

The poster campaign is due to end this weekend, but Mr Orbán appears to be courting nationalist voters ahead of next year’s parliamentary elections. He recently described as an “exceptional statesman” Hungary’s wartime leader Miklos Horthy, who introduced anti-Jewish laws and oversaw the deportation of some 500,000 Hungarian Jews to Nazi death camps.