According to those behind the law, the intention is simply to complete the rehabilitation of Nagy, which began with his reburial in 1989, and to accord him the status of all the other most revered figures of Hungarian history. Instead of attracting universal support, however, the law has been condemned by political opponents.
For some, despite his undoubtedly radical and reformist platform, Nagy was ultimately too much of a communist to be worthy of such an honour. But the main problem lies in the fact it was the communist predecessors of the Socialists - in the form of Janos Kadar and the hardliners who took over from Nagy - whohelped in the crushing of the revolution and the arrest and execution of Nagy.
"This law does not have the pride and honour it should and is little more than a political move," said Laszlo Rajk, a member of the Free Democrats, who despite being in coalition with the Socialists are planning to vote against the bill. "If someone was killed, there must have been a murderer too."
Nagy seemed to have a premonition of what was to come at the end of the show trial in which he was sentenced to death for refusing to recant his actions in 1956. "I wonder if the people who sentence me to death now will be the ones who rehabilitate me later," he is reported to have said.
The Socialists are on a sticky wicket. While some of their predecessors joined forces with Nagy in 1956, others did not. Embarrassingly, the Prime Minister, Gyula Horn, was a member of a workers' militia unit that joined forces with Soviet tanks to suppress the revolution.
Like former communists throughout central and eastern Europe, the Hungarian Socialists say they have reformed and are now Western-style social democrats. Indeed, they say the policies they are pursuing now are precisely those that Nagy was trying to introduce in 1956. "There was a reformist wing in the party in 1956 and, as such, we too are the legitimate descendants of the revolution," said Ivan Vitanyi, one of the bill's proposers. "In our principles and practice today, we are continuing the work of Nagy."
With 54 per cent of the seats in parliament, the Socialist party should have no trouble forcing through the law. But there are many, including the Hungarian President Arpad Goncz, who have been saddened by the rancour of the debate. "I am totally disappointed and bitter," said President Goncz in a television commentary marking the 100th anniversary of Nagy's birth. "Sometimes I am not even sure there was a 1956."
Others, however, believe that, for all the fuss, the legacy of Nagy will not be tainted. "Nagy achieved the unique feat of uniting the whole nation on two occasions," said Janos Rainer, a historian at the Institute for the History of the 1956 Revolution. "The first was in the 1956 itself when, for all his Marxist past, he embodied the nation's demands for independence and freedom; the second was in 1989 when his reburial came to symbolise the democratic takeover. The fact that his figure is now being used to highlight political divisions is strange and awful, but his position in history is secured."
If Nagy is made an official martyr, he will find himself keeping company with some strange bedfellows. In addition to Lajos Kossuth and Istvan Szechenyi, Hungary's 19th century heroes, he will be rubbing shoulders with former Austro-Hungarian Emperor Franz Josef I and Josef Stalin.