Greek MPs have voted to suspend state funding for political parties accused of criminal activities, targeting the neonazi Golden Dawn party.

The legislation was approved by 235 MPs in the 300-member parliament.

Thirty-four others abstained and there were no votes against the motion as Golden Dawn deputies had already walked out of the chamber.

"This legal amendment belongs in the trash - it's illegal and unconstitutional," whined Golden Dawn spokesman and MP Ilias Kasidiaris before the Tuesday vote.

Golden Dawn will lose its €873,000 (£739,000) annual share of state funding for parliamentary parties.

The new law allows an indefinite funding freeze for parties whose leadership is charged with involvement in a criminal group or terrorism.

Golden Dawn is under criminal investigation and its leader and two MPs have been jailed in pre-trial custody as alleged members of a criminal organisation.

Another six MPs have been stripped of immunity from prosecution to face similar charges.

Council of Europe head Thorbjoern Jagland praised the crackdown, but warned that care must be taken to ensure fair trials.

"I think it's very important to differentiate between political work and criminal acts," Mr Jagland said on a visit to Athens.

The fatal stabbing of progressive rap singer Pavlov Fyssas last month led to increasing calls for the party to be banned outright.

But Mr Jagland claimed that could backfire, with similar cases elsewhere in Europe leading to parties re-emerging under different names or going underground where they are harder to monitor.

He said the party funding Bill would not contravene European right laws.

"It is actually unlawful in most European countries to do hate speech, incitement to violence, open racism or denial of the Holocaust," he said.