Doctors Without Borders (MSF in French) accused the European Union and Libya of creating a "blockade" in Libyan coastal waters that would result in more Mediterranean deaths and more migrants stuck in Libyan detention, reports Deutsche Welle.
Last month, Italy approved a naval mission in Libyan waters to train and support the coastguard of the country's UN-backed government in Tripoli, whose authority is challenged by other Libyan factions.
Earlier this week, Libya said it was establishing a "search and rescue" zone off its coast - a move MSF said would extend Libyan patrols into international waters, where humanitarian groups pick up asylum seekers from flimsy boats.
Previously, non-governmental groups (NGOs) had conducted search and rescue operations as close as 11 nautical miles off the Libyan mainland.
The MSF, with its vessel Prudence, is one of nine NGOs involved in migrant rescues in the Mediterranean – rivalled by an anti-migrant group – since the Balkans route was virtually shut to refugees from early 2016.
MSF's Director of Operations, Brice de le Vingne, on Saturday accused European states and Libyan authorities of "jointly implementing a blockade on the ability of people to seek safety" and assaulting their dignity.
"The recent developments represent another worrying element of an increasingly hostile environment for lifesaving operations," he said.
Another aid group active in the Mediterranean, Proactiva Open Arms, also criticized the EU, with its founder Oscar Camps tweeting: "the first NGO out, this is just what the EU wants."
Loris De Filippi, president of MSF's Italian arm said, "We are suspending our activities because now we feel that the threatening behaviour by the Libyan coastguard is very serious [...] we cannot put our colleagues in danger."
MSF said medical staff would, however, keep working from a ship operated by another aid group, SOS Mediterranee, while the Prudence remained idle.