Hungary's ruling party wants supermarkets to close on Sundays, a measure likely to hurt big foreign retailers such as Tesco, Auchan and Aldi which say they were also targeted by new taxes.
Prime Minister Viktor Orban says he wants to protect the Christian day of rest with the sort of trading restrictions in place in Germany, Austria and other European states.
But the plan is the latest in a series of reforms which critics say favour the home-grown companies that Orban, a right-of-centre nationalist, says should be the lifeblood of the economy, at the expense of foreign investors.
Shops with a surface area of 200 square metres or less or those which are family owned will be allowed to open, meaning that huge supermarkets belonging to large multi-nationals will have to shut, losing a strong sales day and sending customers towards smaller rivals.
Some of the three large Hungarian-owned supermarkets already shut on Sunday or have reduced opening hours and support the proposal.
Orban told public radio last week that Hungary, the most indebted nation in central Europe, was now economically strong enough to follow its wealthier European neighbours by adopting legislation on Sunday trading.
"This will get its final shape when parliament approves it, but as for the eventual outcome, I can see a one-way street," Orban said.
Parliament is expected to vote on a draft bill next week. Orban's Fidesz party, which has a two-thirds majority in parliament, is proposing an amendment which would give the government broad scope to grant exemptions to the ban on Sunday trading, depending on local factors.
From next year, Orban's government has also imposed a sharp rise in food inspection costs on the largest retailers in Hungary, a measure, which will hit major foreign players such as Tesco, Spar or Auchan the hardest.
Tesco said it was keen to keep Sunday trading.
"We believe Hungary benefits from Sunday trading," said a spokesman for Tesco, Hungary's top retailer, which runs over 200 stores and is the country's third-biggest employer.
"Customers can choose when and where to shop and our colleagues can benefit from the opportunity to earn more thanks to the Sunday supplement that we pay."
German supermarket chain Aldi said in a statement: "With regard to the regulations on opening on Sundays, the company will support any measures that apply to all players of the retail sector equally, without discrimination."
Bence Retvari, a member of parliament with the Christian Democrat party -- which is allied to the government and which originated the idea of making shops close on Sundays -- denied the law was aimed at foreign supermarkets.
"The criteria are objective, and most Hungarian-owned stores will also have to grant their employees free Sundays." The new rules would create conditions that multi-nationals already face in parts of western Europe, Retvari said.
The three biggest Hungarian retail chains, CBA, Coop and Real, support the proposal.
A CBA spokesman said the majority of its stores were open on Sundays and would have to close under the planned law. However, a spokesman for Coop, which has about 4,000 shops, said most of its stores were closed on Sundays. Real, which has about 2,000 shops, declined to comment. Some of its stores open on Sunday, but with reduced opening hours.
This week, the Hungarian parliament adopted a law requiring retailers to close their Hungarian operations if they make a loss for two years in a row.
Several of the multi-national supermarkets and industry groups said that would disproportionately affect foreign firms, because they typically operate at a loss while they invest to expand their Hungarian businesses.