MEPs have backed legal proceedings by the European parliament against the European Commission over a failure to trigger financial sanctions against Poland and Hungary for undermining the rule of law.

The parliament’s legal service is now expected to prepare a case to be lodged at the European court of justice later this year, pitting two EU institutions against each other in the EU’s highest court, with only the formality of approval by key committees of the chamber now required.

The resolution proposed by the Greens group passed with 506 MEPs voting in favour, 150 against and 28 abstentions on Thursday.

MEPs agreed in their resolution that the EU’s new rule of law mechanism, which links funding from the bloc’s budget to the protection of fundamental democratic norms, should already have been triggered against Poland and Hungary.

In February the commission launched legal action over Hungary’s failure to implement a judgment from the ECJ that legislation on restricting foreign-funding of NGOs was against EU rules.

Last month an ECJ advocate general advised judges that a reform to Poland’s legal system had dispensed with with “the minimum guarantees necessary to ensure the indispensable separation of powers between the executive and the judiciary”.

MEPs have said the mechanism under which budget payments can be deducted, and which came into force on 1 January after a tortuous internal negotiation, had to be seen to be effective.

The commission has said that it cannot be triggered, however, until detailed guidelines are published. Leaders of the main political groups in the parliament have claimed this is merely an excuse for inaction.

Last year the governments in Budapest and Warsaw threatened to veto the bloc’s €1.8tn (£1.6tn) budget and coronavirus recovery plan over attempts to link funding to respect for democratic norms.

Without agreement among the 27 member states, projects financed by the bloc’s seven-year budget would have gone without funds and the €750bn plan to rebuild Europe’s shattered economy would not have been activated.

MEPs fear that the two countries were only won round to backing the budget by behind-the-scenes promises that there would not be an early issuing of financial sanctions.

As a result of the inaction by the commission, MEPs voted in March to give the commission a deadline of 1 June to adopt the guidelines they claimed were necessary. But it the EU’s executive branch is yet to do so. The resolution passed on Thursday highlights that this a “failure to act” by the commission under article 265 of EU’s treaties.

Terry Reintke, a Green MEP, said: “The EU needs a strong basis we can all stand on, which is spelled out in the treaties: democracy, rule of law and fundamental rights. But this is under attack and being dismantled as we speak.

“Instead of defending European values, the commission is watching, writing reports and sitting on its hands. The rule of law needs action now. Unfortunately, it’s clear from yesterday’s debate in parliament that the commission doesn’t seem to feel the same sense of urgency to act.”