"This is a very concerning development and the final adoption of this legislation would negatively impact Georgia's progress on its EU path," the EU's diplomatic service said in a statement.

"This law is not in line with EU core norms and values," it said.

"The proposed legislation would limit the capacity of civil society and media organisations to operate freely, could limit freedom of expression and unfairly stigmatise organisations that deliver benefits to the citizens of Georgia," it said.

(Reporting by Reuters; Editing by Guy Faulconbridge)