China's national legislature is poised to vote this week on a draft law criticized by overseas governments for tightening controls over foreign non-governmental groups by bringing them under direct police supervision.

The proposed law requires that such groups accept police supervision and state the sources of their funding and how their budgets are spent, the official Xinhua News Agency reported Tuesday.

Police would also be permitted to interview administrators and force Chinese partner organizations to terminate any program considered a threat to state security, Xinhua said. Groups seeking to "subvert the state and split the nation" would be banned, it said.

The proposed legislation has drawn criticism from U.S. and European officials and business and academic organizations concerned it would severely restrict the operations of a wide range of groups, further limiting the growth of civil society in China and hindering non-governmental exchanges between China and the rest of the world.

Several hundred NGOs founded, run or financed by foreigners are now operating in China in fields ranging from animal protection to human rights law.

Many overseas NGOs have partnered with Chinese academic and social, groups but operate in a legal gray area that leaves them vulnerable to crackdowns by the security forces.

In one recent example, China in January released and immediately deported a Swedish man it accused of training and funding unlicensed lawyers in the country.

The third and final draft of the foreign NGO law is expected to be voted on by the National People's Congress Standing Committee at its bi-monthly meeting this week. The committee handles the bulk of the congress' legislative work outside of the full body's annual two-week session.

Cooperative agreements between Chinese and overseas colleges, hospitals and science and engineering research institutes will continue to be handled under separate regulations.

Responding to some criticisms, the new draft would allow foreign NGOs to set up branches in multiple locations, eliminate a five-year limit on operating in China, and remove restrictions on hiring volunteers and staff.

It says the foreign NGOs would no longer need to seek approval for occasional programs but their Chinese partners need to register with local authorities 15 days before the activities.

The draft says the foreign NGOs, whether running permanent offices or operating occasional programs in China, generally would not be allowed to recruit new members except for those sanctioned by the state council. That's mainly because China is encouraging its scientists to join influential international organizations on science and technology.

Of greatest concern to foreign groups and governments has been the naming of the Public Security Ministry as the overall body to govern foreign NGOs, something seen as casting those groups under undo suspicion. Those critics have suggested that the Civil Affairs Ministry would be a more logical oversight body.

Critics fear the law may lead to an onerous degree of scrutiny over administrators, with Xinhua saying police could bring investigations at will and demand the termination of any cooperation program "considered to undermine state security."

"Overseas NGOs, which engage in illegal activities including those to subvert the state and split the nation, will be blacklisted by police and banned from operating on the mainland," Xinhua said.