The C-Star, which has vowed to expose what it describes as "collaboration" between privately-funded rescue ships and people traffickers, said earlier on Twitter it had "developed a minor technical problem during the night", leaving it adrift but not in distress.
"We made two choices: that of taking away criminal earnings from traffickers - because fewer persons departing mean the traffickers earn less - and that of financing the United Nations agencies" working with refugees and migrants to "assure respect for human rights in the Libyan camps".
Libyan authorities announced a new search and rescue zone off its coast earlier this week, which MSF says extends into worldwide waters.
The C-Star, a ship used by anti-immigrant group Defend Europe to disrupt humanitarian search and rescue missions in the Mediterranean Sea, has been "stranded in the Central Mediterranean", the Independent reported.
In an interview published Sunday in La Stampa daily newspaper, Italian Foreign Minister Angelino Alfano was quoted as saying, "We must avoid deaths at sea by reducing the departures" from Libya.
Critics of the new policies say they could put lives at risk by delaying rescues in Libyan waters.
Italy, which has borne the brunt of Europe's migrant crisis this year, has also moved to rein in NGOs helping the multinational search and rescue operation by making them sign up to a new code of conduct.
"Under these circumstances, a continuation of our rescue work is not now possible".
Many migrants & refugees attempt to make the unsafe Mediterranean crossing from Libya, often in flimsy boats operated by people smugglers.
German aid group Sea Eye suspended its operations on Sunday, a day after Medicines Sans Frontiers halted the use of their largest rescue boat in the area due to an "increasingly hostile environment for lifesaving rescue operations". "To help those who are in distress is the duty of everyone who is at sea", said Sea-Eye Chairman Michael Buschheuer in a statement.
Migrant aid ships have played a key role in assisting rescue operations. Sea-Eye was then dispatched to help, as its ship was the closest.
"We leave behind a deadly gap in the Mediterranean", Buschheuer warned.
After hundreds of thousands of migrants rescued from foundering boats were brought to Italian ports in the last few years, Italians have become anxious about the costs of caring for asylum-seekers in a country where unemployment is high and the economy is flat. In July, 11,459 migrants crossed from Libya to Italy, less than half the 23,524 who made the journey in June.
Arrivals for the first seven months of this year were 95,214, up 0.78 percent on the same period last year.
Save the Children said it was seeking guarantees it could safely carry out effective rescue operations, and expressed worry for "the possibility that migrants are brought back to Libya, that's not considered a safe place where fundamental human rights are respected".