Adopted by 448 votes for to 197 against and with 48 abstentions, the motion in Strasbourg on Wednesday marked the first time the parliament has initiated steps under Article Seven of the European Union's treaty. An earlier action against Poland was initiated by the EU executive.
But Prime Minister Viktor Orban's chief of staff Gergely Gulyas claimed that the motion did not receive enough support as only the votes cast for or against were taken into account.
"Abstentions should have been counted in the vote, but were not, thus the report failed to get the two-thirds majority necessary to carry," Gulyas told reporters in Budapest after a government meeting.
"Hence the government is taking the necessary measures,...and will decide Monday on concrete legal steps," said Gulyas.
The "most likely" option is a challenge of the result's validity at the European Court of Justice, he added.
Other EU governments could halt any further action, however, and Poland has warned it would do so.
"If it comes to the discussion in the Council, we will be against it. We will veto the decision if it comes to the sanctions," Polish Foreign Minister Jacek Czaputowicz said.
"I think that the EU is trying to exert pressure on countries of our region and we have to demonstrate solidarity in this case," Czaputowicz added.
When asked about the relevant procedure earlier this week the European Parliament's legal service said that traditionally abstentions had not counted as votes cast.
A government document seen by AFP Thursday that lays out Budapest's legal opinion on the issue said that the vote's result was "a serious and manifest breach of essential procedural rules".
"Therefore the resolution adopted is deemed to be legally non-existent or void," it said.
Hungary's ambassador to the EU has also sent a letter to the parliament's secretary-general raising the same points.
Wednesday's vote in Strasbourg was based on a report that voiced concerns about judicial independence and corruption in Hungary, as well as freedom of expression, academic freedom, religious freedom, and the rights of minorities and refugees.
Gulyas said the government firmly denied all of the concerns listed in the report, which was written by Dutch Green MEP Judith Sargentini.
The result triggers the launch of Article Seven, known by some in Brussels as the "nuclear option", which could remove Hungary's EU voting rights.
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