Austria has threatened to sue Hungary at Europe's highest court unless it stops letting migrants slip through their shared border.
Both countries are locked in a bitter row over who should take responsibility for thousands of migrants and refugees making their way towards central Europe.
And on Wednesday, Wolfgang Sobotka, the Austrian interior minister, accused his neighbour of defying an EU law which demands asylum seekers lodge their claim in the first country of entry.
It comes as Angela Merkel, the German Chancellor, insisted that Europe's refugee crisis was "many times better than a year ago," when she announced her controversial open-door refugee policy.
Mr Sabotka also attacked Hungary for refusing to take back refugees whose request for asylum had been rejected in Austria.
"States or groups of states that permanently break the law have to expect legal consequences," he said.
"In that case, the (Austrian) republic must sue. The republic must see that the European Union acts according to the law, full stop.”
He threatened to take the dispute to the International Court of Justice unless Hungary agreed to start accepting migrants rejected by his own country.
The Hungarian government responded by blaming the influx on Germany’s refugee policy and Greece’s failure to process those arriving from Turkey and North Africa.
“Hungary cannot and will not take responsibility for, and suffer the consequences of, the irresponsible conduct of other member states - Austria, Germany - which expressly suggested ignoring the rules, or for other states - Greece - that neglected to do their job,” a spokesman said.
It marks the latest harsh exchange of words in a long-running dispute over how the burden of the refugee crisis, which is the worst to face Europe since World War Two, should be shared by EU member states.
Under the Dublin agreement, asylum seekers are supposed to lodge their claim at the first European country they arrive in.
But a number of countries, including Italy, Greece and Hungary, have been accused of effectively dropping the agreement by allowing migrants to travel onwards to central Europe.
Austria’s government, which is facing tough competition from the far-right freedom party, has already responded with a proposed bill that would see all migrants rejected at the border.
A draft law that would cap the number of migrants allowed into the country at 37,500 was finalised on Tuesday and will be scrutinised by NGOs before being put to a vote in parliament.
The United Nations refugee agency has already warned that the law would break the “taboo” of helping those in need.
It could also lead to Austria facing legal action from campaigners, as the EU considers claiming asylum to be a fundamental right.
Denmark pushed ahead with similar proposals this week that would grant the government emergency powers to turn away asylum seekers at the border.
"The proposal is aimed at [preventing] a situation like the one last year, when it was very obvious that Dublin rules had been de facto sidelined," said Lars Lokke Rasmussen, the country’s Prime Minister.
The governments of both Austria and Denmark are locked in a battle to appease voters as they face tough competition from far-right rivals.
This October, Hungary will hold a referendum on whether to accept EU migrant quotas, and on the same day the far-right Freedom Party is due to stand in presidential elections in Austria.