Hungarian President Pal Schmitt on Thursday signed a much-criticised new media law, just two days before the country takes over the EU presidency, despite widespread criticism from abroad.

The law will be published in the official gazette and thereby come into effect on Friday, Hungarian Internet portal index.hu reported.

Hungary's government has come under intense fire over the new law, which would give a new media authority, headed by members of Premier Viktor Orban's Fidesz party, the right to regulate content of all media, broadcast, print or web-based.

It will also have the right to impose fines for material that "is not politically balanced", to inspect media equipment and documents and to force journalists to reveal sources in issues related to national security.

The Organization for Security and Co-Operation in Europe (OSCE) warned last week that the new legislation "if misused, can silence critical media and public debate in the country".

Amnesty International also warned that: "There is too much potential in this law for its arbitrary application and political interference in the editorial policies of media outlets."

They were joined by press watchdogs and the European Parliament.

Concerns that Hungary was passing a law that ran contrary to press freedom and human rights standards were heightened as it prepares to take over the rotating six-month presidency of the European Union on January 1.

"Hungary will have a particular responsibility for the image of the whole union in the world," a German government spokesman noted, adding that Berlin would "watch with close attention" how the law is applied.

Orban, whose party commands a two-thirds majority in parliament, allowing it to alter the constitution, has remained steadfast however.

"We are not frightened of a few criticisms, or even many criticisms, coming from western Europe or even beyond," he said.