Prime Minister Viktor Orban has said the Central European University had flouted norms in awarding diplomas.

The United States has called on Hungary to suspend implementation of a law that Washington says threatens the continued operation of a Budapest university founded by U.S. financier George Soros.

Hungarian President Janos Ader signed the legislation on Monday despite street protests against it in Budapest and condemnation abroad. Another mass rally against the law is planned for later on Wednesday.

“We’re urging the government of Hungary to suspend implementation of the law,” State Department spokesman Mark C. Toner said late on Tuesday, according to a transcript of a Washington media briefing posted online.

PM Orban alleges violation

Prime Minister Viktor Orban, a critic of liberal civil organisations funded by the Hungarian-born Mr. Soros, has said the Central European University had violated regulations in awarding diplomas, an allegation the college rejects.

“We want to see a review and discussion in order to address any concerns through dialogue with the university itself and other affected institutions going forward,” Mr. Toner said. The law could also threaten the operations of other American universities with degree programmes in Hungary, he added.

Mr. Orban’s government has said the aim of the new legislation is to address administrative shortcomings of foreign universities in Hungary. But critics say the law is part of a wider crackdown on non-government organisations linked to Mr. Soros.

Hungary faced criticism from the U.S. and Brussels on Tuesday over the new law.

Law impact

The top U.S. diplomat in the region said the impact of the legislation on the Central European University (CEU) was a concern, while the European Union's executive Commission said it would be the subject of a debate on Wednesday.