Europe's top court on Tuesday overturned the law Hungary used to close a college founded by George Soros, in the latest clash between the EU and its increasingly authoritarian member.

Soros, the 90-year-old Hungarian-born US investor and philanthropist, set up the Central European University (CEU) in 1991 and in the following years Budapest became the site of its main campus.

However, it was forced to largely move to Vienna in 2019 after falling foul of the new law. "The conditions introduced by Hungary to enable foreign higher education institutions to carry out their activities in its territory are incompatible with EU law," the European Court of Justice said.

The National Higher Education law was written to regulate all international higher eduction institutions, but was widely seen as an attack on the CEU by Prime Minister Viktor Orban.

Soros, who stepped down as chairman of the university's board in 2007, also supports civil society and pro-democracy initiatives critical of Orban's conservative and increasingly authoritarian government.

The European Commission took Hungary to court over the law and Tuesday's judgement found that Hungary had failed to respect its commitments to the World Trade Organisation.

In particular, Budapest should not have discriminated against colleges such as the CEU by demanding that they offer the same degree courses in their state of origin -- in this case the US -- as in Hungary.

And it should not have required an international education treaty to have been signed between Hungary and the country in which the college was founded.

"That requirement is also contrary to the provisions of the Charter of Fundamental Rights of the European Union relating to academic freedom," the ruling said.

It was not immediately clear whether the ruling would allow the university to move some operations back into Hungary.

While students who were already enrolled by 2018 will be able to complete their studies at the CEU's Budapest campus, a large part of its 700 staff -- more than half Hungarians -- have moved to Vienna.

Many of the students and professors are now commuting between the two capitals -- 240 kilometres (150 miles) apart.

The CEU's departure followed that of the Soros-run Open Society Foundations (OSF), which cited Hungary's "repressive" policies when they shut down most operations in Budapest and moved to Berlin in 2018.

Rule of law fight

The college, registered in the US state of New York, and providing American-recognised degrees, educated a generation of Hungary's post-communist elite.

But Orban's camp saw it as a centre of liberal resistance to his hardline conservative rule. Soros, who is Jewish, has become a hate figure for conspiracy theorists around the world and Orban's government has accused him of plotting to flood Hungary with Muslim immigrants.

The Hungarian ruling Fidesz party and allied pro-government media regularly accuse him of working with EU officials in unproven plots against Hungary's national interest. With Hungary seen as having begun a slide into authoritarianism under Orban, Brussels has launched a so-called "Article 7" procedure probing whether Hungary is undermining democratic values.

The European Parliament and some member states are pushing to make payments from the EU budget, of which Hungary is a net recipient, contingent on Budapest fully respecting the rule of law. And last week, a major EU report found that in Hungary, "deficient independent control mechanisms and tight interconnections between politics and certain national businesses are conducive to corruption".

Orban is furiously resisting calls for the budget to be linked to rule of law concerns and with Poland has threatened to block a huge post-coronavirus rescue package seen as vital to the EU economy. He has also demanded the resignation of Vera Jourova, one of the EU's vice-presidents, after she quipped that, rather than a self-described "illiberal democracy" Orban had created an "ill democracy".

Other universities and research institutions including the prestigious Hungarian Academy of Sciences have also protested against moves by Orban which they say restrict their autonomy and funding. Students at Hungary's top arts college, the University of Theatre and Film Arts (SZFE), have been blockading its buildings for over a month in protest at the sudden loss of autonomy to a new, government-picked board.