The European Union has become embroiled in a damaging legal standoff between its legislature and its executive Commission over the release of billions in frozen funds to the government of Hungarian prime minister Viktor Orban.

The release of the funds came on the eve of a major decision on Ukraine for which Mr Orban’s consent was needed.

Parliamentarians from several groups said that the necessary rule of law commitments needed to release over €10 billion in funds were not met by Mr Orban and claimed the approval by the Commission was a mere bargaining chip to make sure he would lift his longstanding objections to opening EU membership talks with Ukraine.

One day after the funds were approved, Mr Orban made a stunning reversal at a summit of EU leaders in December and, by letting his time window to oppose the decision lapse, paved the way for it to proceed.

The Commission has denied allegations this amounted to a trade-off.

“The court case will go ahead to clarify the Commission’s role and margins of discretion about unfreezing of cohesion funds for Hungary. What is looked for is legal certainty,” a parliament official said.