Supporters have gathered at a Budapest university after MPs passed a bill which could force it out of Hungary.
The 199-seat parliament head earlier voted 123 to 38 in favour of the legislation, which places tough restrictions on foreign universities.
The main target is believed to be the Central European University (CEU) and its founder, George Soros.
It is the latest battle declared by the right-wing Prime Minister of Hungary, Viktor Orban, against liberalism.
But within hours of the legislation being passed, staff, students and supporters had surrounded CEU waving blue signs saying “veto” to show their support for the university.
CEU, meanwhile, has vowed to fight the bill.
The English-speaking university, which is still partly-funded by Hungarian-born Mr Soros, is ranked among the top 200 universities in the world in eight disciplines.
But Zoltan Balog, a government minister, told MPs on Tuesday it went “against Hungary’s interests to host experiments, financially supported and evading democratic ‘rules of the game’ in the background, which aim at undermining the lawfully elected government or leadership”.
Hungary’s governing Fidesz party – officials from which have repeatedly referred to CEU as “the Soros university” – see it as a bastion of liberalism.
The prime minister is a known critic of liberal NGOs which are partially funded by Mr Soros, 86, with whom he has a strained relationship.
This bill will effectively force CEU from Hungary – where it occupies prime real estate in the centre – as it requires foreign universities to have a campus both in the capital and their home countries.
CEU only has a campus in Budapest.
It also bans universities outside the EU from awarding Hungarian diplomas without an agreement between national governments – in this case, the US.
Despite this, a CEU spokesman has vowed to “maintain the integrity and continuity of its academic programmes… whatever the circumstances”, adding : “This fight is not over. We will contest the constitutionality of this legislation and seek all available legal remedies.”
CEU Rector Michael Ignatieff has previously said the bill marks “the first time that a member of the European Union dared to legislate an attack on the academic freedom of a university”.
The Central European University
Founded to “resuscitate and revive intellectual freedom” in parts of Europe that had endured the “horrific ideologies” of communism and fascism
Occupies a building that began as an aristocrat’s palace before becoming state-owned offices for a planned socialist economy
Has 1,440 students – 335 from Hungary and the rest from 107 other countries
Presents itself as a champion of free speech, with links to universities in Russia, Kyrgyzstan, Georgia and Kazakhstan