Anjem Choudary, Islam4UK's leader, told the BBC the move was a "failure of the concept of democracy and freedom".
"What the people will see is if you don't agree with the government and you want to expose their foreign policy, then freedom quickly dissipates and turns into dictatorship," he said.
Choudary provoked debate earlier this year by suggesting his group would march through Wootton Bassett, where soldiers' bodies are honoured.
He said the group's action would highlight Afghan civilian deaths at the hands of Nato-led forces.
But politicians described the proposed march as distasteful and many called for the group to be banned.
The order, which comes into effect on Thursday, will also ban the group under the names Call to Submission, Islam4UK, Islamic Path, and London School of Sharia, the Press Association reported.