Despite a year-long anti-immigrant campaign, Orban’s governmen failed to convince more than half of the 8 million voters to go to the ballot boxes on Sunday).

With over 99 percent of the vote counted, 39.8 percent of Hungarians cast a valid vote. Of those, 98.3 percent voted against allowing Brussels to decide on mandatory refugee quotas, while only 1.7 percent said yes.

Orban needed at least half of the voters to cast a valid ballot, which asked the following question: "Do you want the European Union to be able to order the mandatory settlement of non-Hungarian citizens in Hungary without parliament’s consent?”.

The number of invalid votes was over 6 percent, a relative win for the satire Two-Tailed Dog Party, which had called on voters to cast protest ballots.

Opposition parties, including the far-right Jobbik party subsequently called for Orban’s resignation, but the government hailed the result as a victory.

Hungary's government aimed to use the referendum to help divert attention from domestic issues, and boost its drive to stop any EU scheme set to distribute migrants among member states.

Downplaying the importance of the 50 percent threshold for the referendum to be valid, Orban said Sunday morning after casting his vote that the main issue is whether the "no" votes will be in majority.

After the votes were counted Orban sounded defiant.

"Brussels or Budapest. That was the question, and we have decided that the right to decide [with whom Hungarians want to live with] solely lies with Budapest," the prime minister said.

He said he would initiate a constitutional change to reflect the will of the people, and vowed to continue his fight in Brussels against migrant quotas.

"The weapon will be strong enough in Brussels too," he said about the referendum results, adding: "Brussels cannot force its will on Hungary."

Orban did not comment on the low turnout, but pointed out that more Hungarians voted in favour of his stance on Sunday than who many voted in favour of EU membership in 2003.

Orban has long been a staunch opponent of the EU's migration policy, and a fierce critic of German chancellor Angela Merkel's open-door policy.

His government challenged an EU decision last year on migration quotas at the EU's top court, and has refused to take in a single refugee.

It also opposes any mandatory distribution scheme under the EU asylum policy reform, which has been declared politically dead also by Slovak PM Robert Fico, whose country holds the rotating presidency of the EU.

"The whole of Europe has won. Populism and xenophobia have lost," Gianni Pitella, the socilaists group leader in the European Parliament said in a statement Sunday night.

"Stunning result in Hungary. 95% reject EU migration quotas. Are you listening Mrs. Merkel?," Nigel Farage, a leading Brexit campaigner and MEP tweeted.

The referendum setback is a disappointment for the government, which has mounted a massive communications campaign linking migration with criminality and terrorism, aimed at getting out the vote for Sunday.

A few hours before polls closed state television ran a caption claiming that "migrants will move towards Hungary, if the referendum is favourable to them."