Khalid Mishaal dismissed the EU's move as "a flagrant interference" in the Palestinians' internal affairs and urged the Palestinian Authority not to bow to EU pressure.
Javier Solana, the EU foreign policy chief, said on Sunday that European taxpayers would have a hard time supporting the Palestinian Authority if it included a party that supports violence and advocates Israel's destruction.
"It would be very difficult for the help and the money that goes to the Palestinian Authority to continue to flow," Solana told reporters in Tel Aviv.
Mishaal told The Associated Press the EU's stand "harms its advocates and the European stand more than it can harm Hamas".
"It reflects the double-standard policy and playing with the values of democracy and freedom.
"So long as people have opted for democracy, they should respect its results and should not confiscate the right of the Palestinian people to choose [their leaders]," Mishaal said.
Javier Solana expressed concerns
about a political role for Hamas
He added that the Palestinian people would not accept "such a flagrant intervention" in their internal affairs and would not bow to "such pressures".
The Palestinians receive about $1 billion a year in international aid - about half the Palestinian Authority's budget - and EU assistance is slated to reach $312 million in 2006.
The EU warning reflected growing international concern that Hamas, which remains committed to Israel's destruction, could win the 25 January parliamentary vote.
"So long as people have opted for democracy, they should respect its results and should not confiscate the right of the Palestinian people to choose (their leaders)"
Hamas political leader
Hamas, labelled a terrorist organisation by the United States and Israel, swept municipal elections in several West Bank cities last week.
Hamas has been a staunch opponent of the 1993 Oslo Accords between Israel and the Palestinians. It views any such peace treaty as recognising the state of Israel and acknowledging its illegitimate control of Palestine.
It opposes peace with the Israelis and calls for the establishment of a Palestinian state along pre-1948 borders.
But it has set its goal, at least for now, on a complete Israeli pullout from territories occupied during the 1967 Arab-Israeli war.
Hamas has political and social wings, as well as its military wing, the Izz al-Din al-Qassam Brigades, which has claimed responsibility for several attacks on Israeli targets.
Mishaal reiterated that Hamas would not renew a truce with Israel when it expires at the end of the year.
"The general climate in light of the continuing Zionist aggression and [Israel's] refusal to release Palestinian detainees does not encourage us to renew the truce," he said.
The EU's financial support to the PA takes various forms, including aid given to the United Nations Relief and Works Agency for Palestine Refugees (UNRWA) and other development projects.
The EU states on its website that the aid is important to ensure the continuity of basic services to the Palestinian population, following Israel's decision to cut off agreed transfers of customs and tax revenue.
The money helps fund education, health and other basic services, public servants' salaries, and support to the Palestinian police.