New laws in Hungary to restrict foreign ownership of farmland threaten deals already signed besides future contracts, Prime Minister Victor Orban said, unveiling farm reforms he termed the country's most radical in at least half a century.

Mr Orban told farmers that legislation being considered by parliament would mean "turning the page on the communist era agriculture" by championing small and medium sized farms as a basis for boosting production and encouraging investment.

The plans also include measures to protect farmland from bankers and speculators, and from foreign investors against which Mr Orban campaigned strongly in the run up to his election two years ago.

Deals already completed, as well as future ones, could be covered by the reforms, he added, flagging clauses to reclaim land "stolen through dubious procurement contracts", he said.

'Bluff'

The laws appear at odds with EU moves to free up land ownership, under clauses promoting the fre movement of capital.

However, Mr Orban compared the proposed legislation with rules already in place in Austria and France, long-standing EU members.

Separately, opposition politicians questioned whether the new plans would prove as constraining as Mr Orban suggested, with Socialist MP Zoltan Gogos telling news agency MTI that the statement was no more than "bluff".

The land law would not affect foreigners running Hungarian farms through joint ventures with local investors, nor Hungarians employed on those farms to land of their own, Mr Gogos said.

'Amongst the cheapest in Europe'

Hungary is one of the European Union's larger producers of corn and oilseeds, although its crops have been badly hit by drought this year, with its corn harvest seen falling some 45% to 4.5m tonnes on US Department of Agriculture estimates.

However, Hungary's farmland has remained among the EU's cheapest, thanks to restrictions on foreign ownership, and difficulty for gaining clean title to plots which often have many owners.

Savills has reported that Hungary's farmland prices "have been slower to grow compared to some other central and eastern European markets, due to the general heavier ownership restrictions imposed.

"The restrictions have helped make Hungarian land amongst the cheapest in Europe, despite its agricultural potential."