Charities in Britain will be put in fear of criminal prosecution by the "chilling effect" of curbs on political campaigning in the government's lobbying bill that is due to receive its second reading in the House of Commons on Tuesday, a leading human rights lawyer has warned.

Amid nerves in government at the growing opposition to the bill, which will widen the definition of election campaigning by third parties, Helen Mountfield QC warns the proposals could be in breach of the right to free speech.

The legal opinion by Mountfield, who works in the Matrix legal chambers founded by Cherie Booth QC and other human rights lawyers, is released by the National Council for Voluntary Organisations (NCVO) ahead of the second reading of the transparency of lobbying, non-party campaigning and trade union administration bill.

The bill, which is designed to introduce a statutory register for lobbyists and to make trade union funding more transparent, will curtail the ability of charities and other non-party groups to campaign on political issues in the 12 months before a general election.

It would cut from £989,000 to £390,000 the amount third-party groups could spend in this period before a general election. The bill would also broaden the definition of what constitutes "election campaigning", outlined in the Political Parties, Elections and Referendum Act 2000. The new bill says that activity could be deemed to come within the terms of the act if it affects the outcome of an election even if that was not its purpose.

In her legal opinion, Mountfield says the Cabinet Office claims charities will not be covered by the legislation. But she cites a recent report by the Electoral Commission, which warned charities could be covered, to say that the NCVO is right to be concerned. The bill would "have a chilling effect on the expression of views on matters of public interest by third sector organisations".

Mountfield warns of of uncertainty over what the bill means by "for political purpose". She writes: "This uncertainty about what the law requires is likely to have a chilling effect on freedom of expression, by putting small organisations and their trustees/directors in fear of criminal penalty if they speak out on matters of public interest and concern."

She says the "restrictions and restraints are so wide and so burdensome as arguably to amount to a disproportionate restraint on freedom of expression, notwithstanding the legitimate aim of ensuring equality between candidates so that all voices can be heard in an election".

Mountfield illustrates potential dangers to charities by citing the example of a group that campaigned against plain cigarette packaging in the runup to an election. She wrote: "The charity might … be deterred from making its views on packaging known, for fear of triggering an obligation to register as a recognised third party with the Electoral Commission, with the consequent complex and bureaucratic requirements for apportioning and accounting for the costs … The consequence could be to stifle comment on a matter of legitimate public concern, for an extended period of time."

Karl Wilding, director of public policy at NCVO, said: "This bill takes us from a situation in which charities and community groups largely understood the rules on what they could do, into a position where no one has any idea what the rules are, but may nevertheless face criminal prosecution for getting them wrong. This is the inevitable consequence of rushing legislation through without any consultation.

"I would like the government to give serious consideration to putting its proposals on hold. This would give them the chance to consult properly on a solution that addresses concerns about undue influence in politics without the risk of sweeping every charity and community group in the country into a deeply burdensome bureaucratic regime."