The British government is preparing new rules, to be outlined this week, that will make possible to prosecute publicly funded local councils, quangos and universities, which have taken it upon themselves to single out and discriminate against Israel by boycotting companies or Israeli goods.

British Cabinet Office Minister Matt Hancock will formally announce the policy when he visits Israel this week. He said the current position where local authorities had the freedom to discriminate was “undermining” Britain’s national security.

Moreover, local boycotts breach the WTO Government Procurement Agreement, which demands all suppliers are treated equally.

“Locally imposed boycotts can roll back integration as well as hinder Britain’s export trade and harm international relationship,” the Cabinet Office said in a statement.

“We need to challenge and prevent these divisive town-hall boycotts,” he stated.

“Town hall boycotts undermine good community relations, poisoning and polarising debate, weakening integration and fuelling anti-Semitism,” it added.

The measure would apply to the public sector as a whole, including the National Health Service. The only exception to the boycott ban, which also covers action against companies involved in the arms trade, fossil fuel and tobacco, would be official sanctions agreed by the central government.

The move follows a series of local boycotts in recent years that have angered Israeli authorities. In 2014, Leicester City Council instituted a boycott on goods made in Israeli settlements.

Student Unions and Muslim-led councils have also begun in recent years to officially impose such boycotts, and some academics and universities have even signed up to a so-called “academic and cultural boycott”.