The urbane, intellectual figure of Michael Ignatieff seems an unlikely candidate to play the role of bogeyman in the eyes of Viktor Orbán, Hungary’s populist prime minister, as he strives to turn his country into an “illiberal state”.

Yet it was on him that Orbán’s official spokesman focused while scrambling to explain recent mass protests supporting Budapest’s Central European University (CEU) – a small elite institution of higher learning of which Ignatieff is rector, and which could, theoretically, be forced to close because of a new higher education law.

Referring to the academic’s past as a former leader of Canada’s Liberal party, the spokesman, Zoltán Kovács, dismissed Ignatieff in an interview with the Observer as “a failed liberal politician from Canada – very obviously representing a different political agenda”. He also suggested that Ignatieff had publicly misrepresented the law as an attack on educational freedom.

The comments are a departure from the rightwing Fidesz government’s usual target of abuse – George Soros, the Hungarian-born billionaire philanthropist who is the university’s founder and whose Open Society Foundation (OSF) has earned Orbán’s wrath by helping to fund local civil society groups, some of whom have defended refugees and migrants.

But they also appeared to betray a government caught off guard by the strength of popular opposition to the legislation, which was fast-tracked through parliament in days and signed into law last Monday by President János Áder.

Michael Ignatieff, president and rector of the Central European University. Photograph: Attila Kisbenedek/AFP/Getty

The university, nestled between popular bistros and Budapest’s historic St Stephen’s basilica, has gained an international reputation since its foundation in 1991 in the aftermath of communism’s collapse, although it has rarely registered high on Hungarian public consciousness. Yet the capital has been convulsed in the past two weeks by protests over the law’s apparent goal of singling out CEU – which would be forced to open a campus in its registered country of the United States, in line with 27 other foreign universities operating in Hungary, in order to stay open.

Demonstrators have thronged the city’s elegant streets and squares in numbers belying the university’s tiny student body of 1,400, and with an enthusiasm seemingly at odds with the dry principle of “academic freedom” that Ignatieff and others say is at stake.

An estimated 70,000 attended a rally last Sunday, marching across the Chain Bridge that spans the Danube in scenes with the potential to embarrass a government used to revelling in its popular support. In another mass protest on Wednesday, crowds chanted “Russians go home” – a reference to Orbán’s perceived intimacy with Russian president Vladimir Putin – and shouted “Europe,” Europe” as a young man hoisted the European Union flag in the Oktogon square, in one of the city’s busiest thoroughfares. The latter gesture hinted at how the CEU protests have become a focal point for wider discontents while highlighting Hungary’s increasing isolation in the EU under Orbán’s aggressive Brussels-baiting leadership.

The latest confrontation comes amid rising concern over Hungary, which under Orbán has gained a reputation for the draconian and inhumane treatment of migrants, curtailing media freedom and interference in judiciary independence. Orbán’s government has already drawn widespread condemnation this year by detaining asylum seekers – including children of 14 – in shipping containers, a practice human rights groups say breaches EU law. Last week Germany – citing Hungary’s record of ill-treatment – became the first member state to declare it would not send migrants back there under the Dublin regulations, which specify that asylum seekers should pursue their claims in the first EU country they arrived in.

Orbán, who has been in power since 2010, has justified the actions by calling migrants “a Trojan horse of terrorism” and has trumpeted his self-appointed role in defending Christian values.

The new law, dubbed “Lex CEU”, represents the government’s latest front in its declared war on Soros, whom Orbán and his allies have vowed to “extrude” from Hungary in 2017, encouraged by the belief that they would face little resistance from US president Donald Trump, whose supporters include fierce Soros critics.

The anti-Soros assault gained further momentum last week when Fidesz MPs tabled a bill requiring civil society groups that receive money from abroad to list themselves publicly as “foreign-funded organisations” or face prosecution. The proposal is widely seen as an attempt at stigmatising groups receiving funding from Soros’s OSF. Amnesty International has compared the legislation with Russia’s 2012 “foreign agents law”, which led to the intimidation and harassment of civil groups.

“What is troubling is that they portray civil society organisations that are holding them to account as enemies of the state,” said Goran Buldioski, director of the OSF’s Budapest-based Europe office. “This is how they depict the bigger, well-established groups in Budapest. Imagine the intimidating message it sends to smaller organisations in the provinces.” In line with his attacks on Soros, Orbán launched yet another anti-EU salvo this month in the form of a government-backed consultation exercise – provocatively titled “Let’s Stop Brussels!” – which asked voters to respond to what critics say are six deliberately loaded questions presented as binary choices.

The move was reminiscent of last year’s ill-fated referendum proposing to reject the EU’s quota scheme for resettling refugees, which won an overwhelming majority but was invalidated by a low turnout. Yet there are signs that Orbán may have misread the mood and that the CEU attack has given the EU an opening to act on longstanding misgivings about his increasingly authoritarian leadership.

Last week Frans Timmermans, the European commission’s first vice-president, said he would investigate the law targeting CEU – which he described as “a jewel in the crown” – over suggestions that it breached European freedom of movement law on educational services. He promised a decision by 26 April. The European parliament is also scheduled to debate the situation in Hungary after the Easter break.

The EU intervention drew a splenetic response from Kovács – a former PhD graduate from CEU – who described it as “camouflage” for pushing an agenda favouring “illegal” migration. “To sum up, basically it’s all about illegal migration,” he said. “What they would like to enforce and push through this year is the quota system and [that] Europe should be more receptive to illegal migration.”

That, in turn, provoked an astonished reaction from Ignatieff. “My mouth falls open,” he said. “Does he understand what his words imply, which is that the Hungarian government is involved in some political operation because they have some agenda relating to migration? So their idea of a smart move is to attack an institution which has been part of Hungarian life for 25 years. What relevance does that have?

“It just makes perfectly clear that this is a political attack serving some political agenda that doesn’t concern me.”

The law, Ignatieff said, represented “a flagrant and discriminatory attack on academic freedom that is unprecedented in the history of Europe since the second world war”. The university would not close under any circumstances, he said, adding that a negotiated solution would be found.

Ignatieff, 70 next month, has lobbied western capitals, including Washington, winning support from the Trump administration in an implied rebuff to Orbán’s hope of improved ties. A US state department spokesman, Mark Toner, last week called on Hungary to suspend the law, which he said threatened an institution that “is an important conduit for intellectual and cultural exchanges between Hungary and the United States”.

Just as telling is the public support for the CEU. “The direction the government is taking makes me frightened for the future of the country and my place in it,” said former student István Szécsenyi. “I want the democracy that was promised to my parents when communism collapsed.”