The bill to restrict foreign funding to some nongovernmental organizations will not be on the agenda at Sunday's cabinet meeting. Prime Minister Benjamin Netanyahu decided to postpone the debate, given the attorney general's sharp criticism of the proposal.

Sources in the Prime Minister's Office said yesterday that Netanyahu had carefully reviewed the letter sent to him by Attorney General Yehuda Weinstein, in which he said the legislation, sponsored by MKs Ofir Akunis (Likud ) and Faina Kirschenbaum (Yisrael Beiteinu ) was unconstitutional, and that he would not be able to defend it were it challenged in the High Court of Justice.

"The prime minister will think about the matter and will decide [on it] in a few days. Meanwhile, the issue will not come up for discussion," a source in Netanyahu's bureau said.

The proposed restrictions drew sharp criticism yesterday form UK Foreign Secretary William Hague. Britain contributes to projects sponsored by NGOs, some of which are decidedly on the left of the political map. "Britain is deeply concerned by proposals to pass legislation in the Israeli Knesset that would limit foreign funding of NGOs," Hague said, in a statement. "This would have a serious impact on projects funded from the UK and elsewhere to support universal rights and values, and would be seen as undermining the democratic principles the Israeli state is founded on. "While the passing of legislation is a matter for the Israeli Knesset, we strongly call upon all involved to reconsider this move and for the Israeli government to make clear its own opposition to it."

The bill, which combines earlier proposals made separately by Akunis and Kirschenbaum, states that it would it forbidden for foreign governments to provide funding to NGOs that call for boycotts of Israel, work to file suits against Israel Defense Forces soldiers or encourage refusal to serve in the army.

The bill also calls for a 45 percent tax on other "political NGOs" that accept funding from foreign governments. Any such NGO that wants to be exempt from the tax would have to plead its case before the Knesset Finance Committee.