BRUSSELS (AFP) - The European Commission said on Thursday (July 29) that it had agreed with Hungary to extend a deadline for Budapest to meet demands on its €7 billion (S$11.25 billion) coronavirus recovery plan.

"The commission is working together with Hungary constructively, with an aim to finalise the assessment by the end of September," a spokesman said.

"The commission requested an extended deadline and Hungary did not object."

The EU executive is responsible for paying out the bloc's €750 billion pandemic recovery fund and has yet to give Hungary the greenlight for its €7.2 billion plan despite this month missing a deadline to do so.

The stalemate comes after tensions between Hungary and its EU partners blew out into the open over a controversial anti-LGBTQ law that critics say equates paedophilia with homosexuality.

Hungarian Prime Minister Viktor Orban portrays the legislation as protecting children and refuses to withdraw it despite the criticism and legal action from the European Commission, the EU's executive arm.

The EU insists that its appraisal of the recovery plan does not involve the LGBTQ law and that the delay is due to shortcomings by Hungary on anti-corruption commitments and guarantees on the independence of the courts.

But Hungarian officials have said they believe the EU was under pressure to refuse the plan because of the LGBTQ law.