But behind the Strasbourg knockabout lay some serious questions for Hungary and the European Union, which it joined in 2004. Opponents describe the media law as a political gag that will destroy press freedom in Hungary – part of an alarming platform of populist "reforms", go-it-alone economic policies and constitutional changes that threatens democracy and individual liberties. Orbán denies the charges. But, if true, what should the EU do? What recourse does Brussels have when an EU member goes "rogue"?

European commissioner Neelie Kroes said this week a preliminary inquiry found the new law "unsatisfactory" and that EU concerns had been conveyed to Budapest. Kroes targeted rules requiring registration and "balanced reporting" by all media outlets, including bloggers, and controls on non-Hungarian media. She did not say when the inquiry would be completed or what action the EU might take if Hungary ignored its findings.

Orbán says the law will be amended if it breaches EU legislation. But he has simultaneously told EU members not to interfere, accusing France and Germany in particular of rushing to judgement. "No one single state or nation has the right to criticise," he said earlier this month. EU attempts to rewrite the law would be "discriminatory", he added.

Hungary coincidentally took up the six-month rotating EU presidency on 1 January, and Orbán made clear he would cause maximum embarrassment if Brussels insisted on meddling in his domestic policies. "If you mix up the two, obviously I am ready to fight … It won't just be detrimental or damaging to Hungary alone but … to the EU as a whole," he said in Strasbourg. It was an extraordinary statement: in effect, the EU's standard-bearer was threatening the EU.

Charles Grant, director of the Centre for European Reform thinktank in London, said the EU could suspend relations with member states that flouted European law, as happened briefly in 2000 when Jörg Haider's far-right Freedom party joined the Austrian government. But suspension was a "nuclear option", he said, and unlikely to happen.

"Like many people I am very disturbed by developments in Hungary. But 'rogue state' is not a phrase I would use. Hungary has not stopped being a democracy," Grant said. A more probable scenario was that Orbán's anti-free-market policies would eventually end with him "eating humble pie" and asking for EU and IMF help.

The impact of Orbán's behaviour on EU influence in the world is another worrying issue. Angela Merkel, Germany's chancellor, has warned Europe's collective authority in dealing with abusive regimes could be undermined. If Hungary's flouting of EU standards goes unpunished, other EU states with questionable human rights and civil liberties practices may feel encouraged to persist. And what is EU candidate Turkey, often accused of curtailing media freedoms, to make of it all?

There is certainly a strong whiff of double standards in Hungary's treatment. Susi Dennison, a policy fellow at the European Council on Foreign Relations, said many European countries could be accused of flouting the spirit if the not the letter of EU law: Italy and Malta for their handling of asylum seekers; France and Slovakia for their treatment of Roma; and Poland and the UK for their covert collaboration with torture-related terrorist renditions. Human Rights Watch's 2010 annual report also lists numerous abuses in EU countries. Hungary was easier to pick on because it's small, Dennison said.

The controversy has sparked an overdue discussion about maintaining common standards, Dennison said. "Until recently EU governments and the Commission have found it inappropriate to discuss domestic affairs at a European level, and certainly not in public … Instead they operate a gentlemen's club …" she said in an ECFR analysis. But now, outrage over Orbán's antics suggested "the long-standing civil society message [is] finally being heard: that breaches of the EU's fundamental values, even in only one member state, are still a source of collective shame."