A trumpet fanfare, a wine reception and celebratory speeches, but alongside it all, an undertone of melancholy: the opening of Central European University’s Vienna campus on Friday also marked the first time for decades that a university has been forced out of a European country.

CEU, founded by the billionaire financier and philanthropist George Soros in 1991, has provided free or cheap English-language graduate education in Budapest to thousands of students from eastern Europe and beyond, and is regarded as one of the best universities in the region.

But the Hungarian government has revoked CEU’s ability to issue US-accredited degrees in the country, leading to the exodus to Vienna. The university fell victim to a sustained campaign against Soros by Hungary’s far-right prime minister, Viktor Orbán, who has painted the Hungarian-born Soros as the mastermind of a plan to destroy Europe with liberal values and increased migration.

“There’s no other university in Europe or the US that has been forced out on the political whim of a leader,” said CEU’s rector, Michael Ignatieff, in an interview prior to the ceremony. He said the lack of support from Donald Trump’s administration for a US institution under attack abroad could have serious consequences for US universities across the globe.

Soros, now 89, travelled to Vienna to attend the inauguration of the new campus and said he was pledging €750m of additional funds to the university going forward, which Ignatieff said would secure its future for many years to come. Soros referred to CEU’s battle with Orbán as “an epic struggle against a repressive regime”.

In a recent interview with the Guardian, Soros said he was unlikely to return to his home country as long as Orbán remained in power. “It’s quite dangerous because he has got some blind followers, just like Trump, and they may try to get me,” he said.

The Hungarian government insists that denying CEU accreditation to issue US degrees in Hungary is a purely administrative matter, though officials have frequently disparaged it as a subversive institution, with the key Orbán ally Mária Schmidt referring to it as “George Soros’s forward garrison in Europe”.

For the coming academic year, the university’s faculty and students will have to travel between Vienna and Budapest but, as of next year, 90% of CEU students will have the majority of their teaching in Vienna. The university will retain a research presence in Budapest.

Michael Ludwig, the mayor of Vienna, said the Hungarian government’s attack on CEU “should have no place in a united Europe” and said he felt duty-bound “to open our doors immediately” to welcome the university to Austria.

“We have to beware of the ongoing challenges threatening our understanding of democracy, pluralism and academic freedom,” said the Austrian education minister, Iris Rauskala. She thanked Soros for his contribution to academic study.

Ignatieff said the focus on Soros by the Hungarian government is a red herring, and criticised the controversial US ambassador David Cornstein for accepting Orbán’s line: “The fact that George Soros supports this university is irrelevant to the fact of whether you defend its academic freedom. And the American ambassador doesn’t think that.”

Cornstein, an octogenarian jewellery magnate who is longstanding friend of Trump and has no diplomatic experience, arrived in Budapest vowing to persuade Orbán to keep CEU in the country. In the end, however, he gave up, portraying the battle as a personal fight between Orbán and Soros and publicly lavishing praise on Orbán as a “perfect partner” for the US.

Last month he told the New York Times how, after helping to secure Orbán a much-coveted meeting with Trump in the Oval Office, he flew back to Budapest with Orbán and the two men stripped to their underwear and relaxed on couches at the back of Orbán’s plane.

Ignatieff noted that US universities had more overseas affiliates than any other country, and said CEU’s woes had wide-ranging implications for similar institutions.

“The failure of an American ambassador to defend one institution here sets up a worrying context for China, Singapore, Abu Dhabi. All the places where American institutions are to be found, they may wake up one day as I woke up to find out that the United States government is not prepared to support them.”