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Hungary has vowed to challenge EU blackmail after a draft plan emerged to cripple Budapests economy if it blocked a 50 billion aid package for Ukraine.

The row was sparked by a report that suggested Brussels had drawn up proposals to target Hungarian finances if Viktor Orban, the prime minister, refused to drop his veto at a Brussels summit this week.

A leaked document, cited in a report by the Financial Times, suggested EU officials were preparing to cut off funding to Hungary to trigger a run on its currency and spook investors to hit jobs and growth in the Central European state.

The sabotage plot was allegedly drawn up to be used as a form of punishment unless the Hungarian leader agreed to drop his veto over the four-year plan to shore up Ukraines war-stricken economy.

But instead it was used in a mounting political stand-off between Budapest and Brussels over the blocs support for Kyiv.

The initial row was sparked in December last year when Mr Orban refused to sign off on the financial package, known as the Ukrainian facility, at a European Council summit. He has vowed to block it again at an emergency gathering on Thursday.

Brussels is using blackmail against Hungary like theres no tomorrow, despite the fact we have proposed a compromise, Balasz Orban, the prime ministers political director, said.

Now, its crystal clear: this is blackmail and has nothing to do with the rule of law. And now theyre not even trying to hide it.

Janos Boka, Hungarys EU minister, added: The document, drafted by Brussels bureaucrats, only confirms what the Hungarian government has been saying for a long time: access to EU funds is used for political blackmailing.

The leak also triggered an internal row within the EU as sources suggested the apparent threat had lowered the bloc to the prime ministers level.

The Hungarian premier has repeatedly blocked or frustrated attempts by Brussels to support Ukraine or hammer Russia since the start of the full-scale invasion in February 2022.

He is seen as Vladimir Putins closest ally within the European Union.

The US has accused Mr Orban of acting in the interest of the Russian president by maintaining close ties with Moscow.

A senior EU official poured cold water on the FTs report, saying it does not reflect the status of the ongoing negotiations and the document does not outline a plan.

The European Commission said it was not aware of the proposal to cripple Hungarys economy.

Diplomats denied knowledge of the document, suggesting it had not been discussed at any significant level as a potential plan, and described it as spin.

But most said the leak was evidence of the growing despair Brussels has with Budapests ability to snarl up decision-making with its veto.

Were not willing to further entertain his antics, a diplomat said.

An insider added: Patience is wearing thin with Orban.

If Brexit hadnt happened I think Hungary would have been confronted much more forcefully before now.

However, on Monday night there was hope of a compromise by Hungary when EU leaders met to discuss the Ukraine fund on Thursday.

Budapest has told national capitals it will allow the 50 billion in loans and grants for Kyiv to be funded from the blocs budget as long as it can veto the scheme in the future through an annual review.

Ahead of the summit, some EU leaders and the European Parliament had mulled over a plan to remove Hungarys voting rights by triggering Article 7.

However, many European capitals deemed this measure to be extreme and suggested it would not get unanimous support from the member states.

Another plan B drawn up by European officials would see the blocs 26 other members finance the aid for Kyiv among themselves.

Brussels has often used economic threats against member states, including Hungary and Poland in disputes over the rule of law and Greece during the Eurozone crisis.

But it has never gone as far as threatening to crash a member states economy for not falling in line with a bloc-wide plan.

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Hungary vows to defy EU's economic 'blackmail' over Ukraine funding - Yahoo! Voices