The legality of dismissals of one in five of Hungary's academics and other higher education staff is escalating into a constitutional crisis after conflicting findings by the courts and the ombudsman's office in Budapest.

The ombudsman is considering calling on the Constitutional Court to rule on the legality of last year's budget amendment which led to the dismissals last September.

A number of labour court rulings have stated that the 1995 budget amendment, which cut state funding to higher education, was in itself sufficient cause for dismissal. But these rulings fly in the face of a report by the ombudsman which found lack of finance was insufficient reason for dismissal.

The ombudsman was called in last year to examine the dismissals by Laszlo Hethelyi, a reader of mathematics at the Technical University of Budapest, and himself the object of a dismissal order. He argued that the whole process was illegal but lost his own case at the labour court last week, and is now preparing to appeal.

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In another blow to the handful of former staff still fighting their cases, an earlier labour court judgment in favour of a dismissed lecturer at the University of Pecs in southern Hungary has been overturned by an appeal court. Peter Polt, the deputy ombudsman, said that his office had no authority to examine the labour courts' decisions or procedures. However, he said: "One step is to ask the Constitutional Court to examine some aspects of the law. There has been no decision on this yet, nor have we worked out a precise framework, but a move is likely very soon."

The labour court rulings themselves "contain an admission that the court did not question whether this kind of redundancy procedure might involve discrimination", he said, with the implication that the dismissals did indeed involve arbitrary discrimination and violate a constitutional principle.

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Latest figures from the education ministry reveal that 10,400 dismissals or forced retirements from higher education took place last year. But in spite of the supposed cash shortage, 4,8 staff were taken on. The Hungarian press estimates that 2,000-3,000 of the former figure involved educational staff, and therefore were potentially illegal, according to the ombudsman's understanding of the law.