In a sweeping judgment, the CJEU found that the 2021 law – which bans content relating to LGBTQ+ people in schools and on primetime television – conflicts with a society founded on pluralism and fundamental rights, including non-discrimination and freedom of expression.

The decision follows a landslide election victory in the country for Péter Magyar, who has pledged to tackle corruption and raise living standards but has so far given little indication of whether he will reverse policies introduced by Viktor Orbán, defeated after 16 years in power.

Mr Magyar has committed to securing EU funds for Hungary’s economic development. Some of this funding was frozen over the LGBTQ+ law, while larger sums were withheld over concerns including academic freedom, asylum rights, corruption and judicial independence.

The ruling is the first in which the CJEU has found a member state in breach of EU law solely on the basis of violating the union’s fundamental values, as set out in article 2 of its treaty.

Hungary’s 2021 “child protection” law imposed restrictions on how LGBTQ+ people are portrayed in education and media, preventing such content from appearing in school materials or in television programmes, films and advertisements broadcast before 10pm.

In its judgment, the court said the law was “contrary to the very identity of the union as a common legal order in a society in which pluralism prevails”, adding that Hungary could not “validly rely on its national identity” to justify breaching fundamental values.

Dismissing the government’s argument that the legislation was designed to protect children, the court said the law “stigmatises and marginalises non-cisgender persons” by linking them to individuals convicted of paedophilia, an association “to encourage hateful conduct towards them”.

The CJEU said it expected Hungary to comply without delay and ordered Budapest to cover its own costs as well as those of the European Commission, which brought the case.

The Hungarian government has been approached for comment.

Tineke Strik, a Dutch Green MEP overseeing the European Parliament’s rule of law work on Hungary, said it was now for the incoming administration to ensure that “the full restoration of the rights of this community is front and centre in its plans to reinstate the rule of law. Anything less than that would render those reforms non-credible.”

Eszter Polgári, of the Háttér Society, described the ruling as “a milestone for protecting human rights in the European Union” and “a historic victory for LGBTQI people in Hungary”.

She said: “The [court] was firm: no state can outcast LGBTI people through stigmatising, and, if needed, the [ECJ] steps up to protect these values.”