Hungary's president signed amendments to the country's higher education law that could force a Budapest university founded by billionaire American philanthropist George Soros to close or move.
Central European University said it "strongly disagreed" with President Janos Ader's decision and vowed to challenge what it called a "premeditated political attack on a free institution."
Ader said in a statement that the bill setting new conditions for foreign universities in Hungary was in line with the Constitution and international treaties and did not infringe upon academic freedoms.
Had he had concerns with the bill, Ader could have asked the Constitutional Court to review the amendments or sent it back to parliament for reconsideration. Nonetheless, Ader acknowledged that the fast-tracked approval of the law and some of the new conditions "provoked antipathy in many people."
Several hundred people had gathered outside the president's offices in Buda Castle to protest his action.
"As I have said before, we are willing to sit down with the Hungarian government to find a solution to enable CEU to stay in Budapest and operate as we have done for 25 years," CEU Rector Michael Ignatieff said. "However, academic freedom is not negotiable. It is a principle that must form the basis of any future agreement."
About 70,000 people rallied in support of CEU on Sunday, calling on Ader to refrain from signing the legislation approved last Tuesday. It was the third rally in eight days in support of the university, which enrolls over 1,400 students from 108 countries.
Ader called on the government to "immediately" begin talks with affected institutions about the implementation of the new rules.
One new stipulation demands bilateral agreements with the home countries of universities from outside the European Union within six months, while another would require schools to establish campuses in their home countries by the end of the year.
For CEU, Hungary is demanding bilateral agreements with the United States and the state of New York, where the school is accredited, but does not have a campus.
The bill was approved by lawmakers from Prime Minister Viktor Orban's Fidesz party and their Christian Democrat allies last week.
"The situation is that in Hungary we are not closing a single university," Orban said Monday in parliament. "In Hungary, we usually establish and open universities. You can trust in this in the future, too."
Orban earlier said CEU was "cheating" and enjoyed an unfair advantage over other local schools because its students can earn both U.S. and Hungarian diplomas.
CEU has vowed to remain in Budapest despite invitations to possibly relocate from cities in Lithuania and Poland.
Orban has accused the billionaire of trying to influence Hungarian politics through his support of non-governmental groups like Transparency International and of working against Hungary's interests by supporting refugees and migrants.