Hungary's renowned Central European University announced Monday it had been "forced" to move its most prestigious study programmes to Vienna after a long and bitter legal battle with Prime Minister Viktor Orban's government. "CEU has been forced out," Michael Ignatieff, rector of the university founded by US-Hungarian billionaire George Soros, said in a statement. Set up in 1991 and chartered in the US state of New York, the CEU says it was the target of a law passed in April 2017 that placed tough requirements on foreign universities. Despite taking steps to comply with the new rules, the university said the government still did not yield and it needed to take measures in order to recruit new students for the next academic year. "We can't play this game any longer, we are moving to a country where there is rule of law, from now on we will admit our new students in Vienna," Ignatieff later told reporters at a press conference. In October the university set a deadline of December 1 for Orban's government to come to an agreement to allow it to continue to operate its US-accredited courses but no solution was reached. The CEU's departure is widely seen as part of a broader campaign waged by Budapest in recent years against Soros, 88, whom Orban accuses of orchestrating migration flows. "This is unprecedented. A US institution has been driven out of a country that is a NATO ally," said Ignatieff. A 22-year-old CEU student from Russia, who gave his name as Vladimir, said the university's fate reminded him of how the Russian government had treated a similar institution in Saint Petersburg. "Even in Russia, the university was finally given a licence and it can operate now, but here it cannot -- that says a lot about Hungary," he told AFP. - 'Political bluff' - The CEU, however, plans to keep its Budapest campus and those students who have already enrolled there will be able to complete their studies. It said it also "retains accreditation as a Hungarian university and will seek to continue teaching and research activity in Budapest as long as possible". But it is the institution's US-accredited masters programmes -- around 80 percent of its total activity -- which have done most to attract students from over 100 countries to the CEU, long regarded by the nationalist Orban as a hostile bastion of liberalism. "The Soros university is leaving but staying," said government spokesperson Zoltan Kovacs on Twitter after Monday's announcement. "It's common knowledge that a significant number of its courses will still be held in Budapest. This is nothing more than a Soros-style political bluff, which does not merit the attention of the government," he added. - 'Loss for Hungary' - The government said last year's education law cited by the CEU was originally brought in as the university had an "unfair advantage" over other universities by offering dual degrees. But the law -- denounced by critics as a blow against academic freedom -- was cited in a recent scathing and wide-ranging EU report on Hungary that prompted the European Parliament to launch unprecedented legal action against Budapest in September. The EU Commission is "deeply concerned by the fact that the Central European University has decided to move to Vienna," a spokesman said in Brussels, noting that the Commission had referred Hungary's education law to the Court of Justice of the European Union in 2017 and the case was still ongoing. In Washington, State Department spokeswoman Heather Nauert said the US was "disappointed that the Hungarian government and CEU have not concluded an agreement". "The departure of these US-accredited programmes from Hungary will be a loss for the CEU community, for the United States, and for Hungary," she said in a statement. The CEU's departure follows that of the Soros-run Open Society Foundations (OSF) which shut down most of their operations in Budapest and moved to Berlin in August, citing the government's "repressive" policies. Other universities have also protested against moves by Orban which they say restrict their autonomy and funding, as well as the banning of gender studies courses, a step that mainly affected the CEU.