The council-convened panel initially decided Dr Rakasz's experience was not "equivalent to, or as satisfactory as, a New Zealand-trained doctor" and rejected his application.
Dr Rakasz, who during an earlier stint in New Zealand worked at Waikato Hospital, is registered as a general medical doctor in this country and able to work at that tier of the profession.
The medical council's position has dumbfounded two British surgeons who provided glowing references recommending Dr Rakasz.
"I do not know the reasons for refusal to recognise his training," University of Birmingham neurosurgery professor Colin Watts told the Otago Daily Times.
"He was employed by UK National Health Service so had to meet criteria. His Hungarian training did not seem to be an issue."
Alistair Jenkins, a consultant neurosurgeon at the Royal Victoria Infirmary, in Newcastle, is the president of the British Neurosurgical Society, and also one of Dr Rakasz's trainers.
"He had high-level support from some of the most prominent surgeons in the biggest units in the country, and the level and extent of his training is unimpeachable," Jenkins said.
"I am well aware of the small island exceptionalism which makes New Zealand feel that training, or indeed anything, elsewhere must be inferior.
"It is an arrogant mindset which impedes progress and globalisation and in this case, common humanity."
Medical council chairman Curtis Walker said as the matter was before the court he was limited in what he could say about the case.
"The council has said that it is prepared to have another look at the question of whether Dr Rakasz's [training] is comparable.
"Council has rescinded its decision to decline his application and has offered to convene an entirely new panel to consider the matter afresh, including a further interview with Dr Rakasz.
"Dr Rakasz has not taken up council's offer to do this and has decided to proceed with his appeal in court."
The southern neurosurgery service is meant to be staffed by three neurosurgeons but it has never had a full complement of doctors.
For the past three years just one neurosurgeon, Ahmed Taha, has worked in Dunedin, and doctors in Christchurch have had to treat patients if he is unwell or on leave.
Dr Rakasz, whose family have settled with him in New Zealand, is now resigned to having to leave the country to find specialty work in his chosen field, but said he was continuing his case on behalf of other overseas-trained doctors in similar straits.
"I have a deep feeling of injustice ... I became a doctor because I believe I was placed here to help people and my patients and the people of Dunedin deserve this service.
"They don't deserve to have to fly to Christchurch for treatment.
"I believe people here need a good, stable service with well-trained surgeons to look after them, and having been trained in different systems I believe I can help improve things here."
