Thousands of people in Georgia have protested for the third consecutive night over a bill they say is inspired by laws used in authoritarian Russia to crush dissent.

The law would force non-government organisations and media outlets that get more than 20% of their funding from abroad to register as an “organisation serving the interests of a foreign power”.

It is seen as a major test of whether Georgia will move closer to the West or to Russia. It is also being watched closely by the European Union, as it considers the country’s bid for full membership.

Some 10,000 people were on the streets of the capital Tbilisi on Wednesday evening, many of them waving Georgian and European flags, holding signs reading “Yes to Europe, no to the Russian law”.

The protesters managed to defeat a similar bill last year, with the government citing the need to reduce “confrontation” as it dropped the proposal.

This time the bill passed the first of two readings it needs to be brought into law, but not without controversy – opposition politicians boycotted the vote and four of them were removed from the rowdy parliamentary session amid calls of “No to the Russian law”.

Soon after the vote, the EU said: “This is a very concerning development and the final adoption of this legislation would negatively impact Georgia’s progress on its EU path.

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“This law is not in line with EU core norms and values.”

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It said the proposed bill would “limit the capacity of civil society and media organisations to operate freely, could limit freedom of expression and unfairly stigmatise organisations that deliver benefits to the citizens of Georgia.”

The bill’s main backer, Georgian prime minister Irakli Kobakhidze, claimed Western officials had provided “no arguments” against the bill and he would not bow to countries, including the US and UK, that have urged a change of heart.

President Salome Zourabichvili said she would veto the law if it was passed – but parliament can override her veto.

Activist Paata Sabelashvili said: “It is very hard to predict any scenario, because the government is unpredictable, unreliable, untruthful, sarcastic and cynical.

“People here are just flowing and flowing and flowing like rivers.”

Opposition politician Aleksandre Ellisashvili said those who voted for the bill were “traitors” and the rest of Georgia would show them that “people are power, and not the traitor government”.

Zaza Bibilashvili, from civil society group Chavchavadze Centre, said the law would keep Georgia “in the Russian sphere of influence and away from Europe”.

Surveys show up to 90% of Georgia’s 3.7 million people want their country to be in the EU but the bloc has said it must reform its political and judicial systems.

Brussels has also been frustrated by the Georgian government’s closeness to Russia – it has not imposed sanctions like other Western countries have, and it has restored direct flights.

But many Georgian people are suspicious of Russia, at least partly because it helped two breakaway Georgian regions – Abkhazia and South Ossetia – to get de facto independence in the 1990s and in 2008.

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