BUDAPEST (Reuters) - Hungary's annual Budapest Pride should be held in a "closed venue" this year rather than processing along an avenue in central Budapest as previously, Prime Minister Viktor Orban's Chief of Staff said on Wednesday, citing child protection.

It was unclear whether the government intended to move the event inside or also restrict access.

The plan appeared to be part of Prime Minister Viktor Orban's restrictions on the activities of the LGBTQ+ community as the nationalist leader prepares for elections in 2026 in which his right-wing Fidesz party faces an unprecedented challenge from a new opponent.

Community members say Pride is a family friendly event and poses no threat to children.

Orban, a long-time ally of President Donald Trump, told supporters on Saturday that Pride organisers "should not even bother" this year as the event would be a "waste of money and time," without revealing any specifics.

His chief of staff, Gergely Gulyas, told news site 24.hu on Wednesday that Pride should not be held the way it has been in the past. He said the goal was to "enforce the point of view of child protection" and that he did not see any such risk with "a Pride that is held in a closed space."

Gulyas said the government would discuss the matter at Wednesday's meeting and would propose legislation later. The organisers of the Pride march did not immediately respond to a request for comment.

For decades, Pride participants have processed down Andrassy Avenue, a spacious, tree-lined street in Budapest's city centre.

Orban, in power since 2010, promotes a Christian-conservative agenda and in 2021 banned the "promotion of homosexuality" among under-18s despite strong criticism from rights groups and the European Union.

Orban's government has said the law -- which appeals to Fidesz' core voter base -- is meant to protect children and does not target the LGBTQ+ community.

The law has caused anxiety among gay, bisexual and transgender Hungarians and the European Commission referred Hungary to the Court of Justice of the EU over it in mid-2022.

Gay marriage is not recognised in Hungary and Orban's government has redefined marriage as the union between one man and one woman in the constitution, and limited gay adoption.

(Reporting by Anita Komuves; editing by Philippa Fletcher)