Fidesz's departure from the EPP group is likely to reduce PM Orban's influence in Brussels following a long conflict over his perceived backsliding on the rule of law and human rights.
Hungary's ruling Fidesz party has said it was leaving the largest centre-right political group in the European Parliament after the faction moved towards suspending it in a tug-of-war over Prime Minister Viktor Orban's democratic record.
"I hereby inform you that Fidesz MEPs resign their membership in the EPP Group," Orban wrote in a letter to the faction's head, Manfred Weber, which was published on Twitter by Katalin Novak, a Fidesz deputy chairwoman.
The EU has lambasted Orban for putting courts, media, academics and non-governmental organisations under tighter government control. Orban, who faces a national election next year, denies the criticism and has refused to change tack.
"I welcome the long overdue departure of Fidesz and Viktor Orban from mainstream European politics," said Dacian Ciolos, head of a liberal group in the European Parliament. "There is no space for the toxic populism of Fidesz in mainstream European politics."
Earlier on Wednesday, the EPP group voted overwhelmingly to allow for suspension and to make ejection of member parties easier.
A separate motion to freeze out Fidesz was expected soon.
Calling the changes "a hostile move against Fidesz", Orban reacted before the EPP faction denied its 12 Fidesz members the right to speak on behalf of the group or represent it in other work of the chamber.
In his letter, Orban wrote that limiting the ability of Fidesz members of the European Parliament to carry out their duties "deprives Hungarian voters of their democratic rights".
The conservative EPP faction includes German Chancellor Angela Merkel's CDU, Poland's opposition Civic Platform, Belgian Christian democrats, France's Les Republicains and others.
Without the 12 Fidesz members, it will have 175 EU lawmakers and remain the largest in the 705-strong chamber.
Fidesz has been suspended from the EPP pan-European party since 2019, though its EU lawmakers have so far remained in the conservative faction in the European Parliament.
Forcing a university founded by liberal billionaire George Soros to leave Hungary and Budapest's opposition to strict conditions on receiving EU funds were "fundamental" problems, Weber said.
Mujtaba Rahman of the Eurasia Group think tank said the development was "a big strategic loss for Orban in Europe, who will now lose both the influence and protection that the EPP afforded him".
"His departure from the EPP will lead to him adopting more extreme positions towards Brussels and escalating tensions between the two," he said.