The unpopular law contains retains existing fines of up to €600,000 ($746,000) for unauthorized protests outside buildings "which provide basic services to the community", a definition that encompasses everything from hospitals to universities and the Spanish parliament.
The new law, which the government argues will ensure public security, also forbids the photographing or filming of police officers in situations where doing so could put them in danger. This could result in a fine of up to €30,000. Showing a "lack of respect" to those in uniform, meanwhile, could lead to a fine of €600.
The law has been dubbed the 'ley mordaza' or 'gag law' by opposition groups and the Spanish media, many of whom believe the law will curtail individual rights.
It was passed in the lower house of the Spanish parliament on Thursday, despite all parliamentary groups except for the ruling PP voting against the legislation. It will now be reviewed by the Spanish senate where the PP enjoys an overwhelming majority.
Spain's major opposition party, the socialist PSOE, vowed to overturn the legislation if they reclaim power in general elections set for late 2015.
The eventual vote was 181 for and 141 against and was met with protests from opposition politicians.
Seven MPs from the left.wing IU party had to be asked twice to take off white gags that they had taped over their mouths to express their clear rejection of the draft law, while members of the Solfónica choir, connected to Spain's indignant protest movement, burst into a rousing rendition of 'Do you hear the people sing' from the musical Les Misérables.
Protesters in the gallery of the Spanish parliament belt out a rendition of 'Do you hear the people sing'? from Les Misérables on Thursday.
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Spain's new Citizen Security Law also contains tough new measures to deal with the increasing number of immigrants trying to cross the border of Spain’s two North African enclaves of Ceuta and Melilla.
Under an amendment recently added to the legislation, Spanish authorities will be able to instantly deport migrants who illegally enter Spain by clambering over the border fences from Morocco into Ceuta and Melilla.
Spain has been internationally criticized in recent months for its treatment of migrants in the two Spanish enclaves, with critics saying the return of immigrants to Morocco once they have already crossed into Spain flouts both international and EU laws.