South Africa's ruling party has criticised a university rector's decision to drop disciplinary charges against four white students whose video humiliating black workers sparked a race outcry.

The home-made video, filmed in a former whites-only hostel, showed five black workers taking part in initiation-like rituals which included kneeling to eat food into which a student had urinated.

"In a gesture of racial reconciliation, and the need for healing, the University of the Free State will withdraw its own charges against the four students," University rector Jonathan Jansen said in his inauguration speech late on Friday.

The African National Congress, however, rejected the decision.

"Our view is that such an act will not lead to reconciliation but it will again harden racial attitudes not only in the university but in the country broadly."

Jansen is the first black rector and vice-chancellor of the university in Bloemfontein, the capital of the central Free State Province and an Afrikaner-stronghold.

He acknowledged that the Reitz hostel was "a place of infamy that brought great shame to our university and unprecedented outrage to our country as the world saw four young white men racially humiliate five black workers."

But he added: "The deeper issues of racism and bigotry that conflict our university — and many others — will not be resolved in the courts."

'A model of racial reconciliation'

The four would be invited to continue their studies at the university, the workers would be paid compensation, and the Reitz hostel would re-open as "a model of racial reconciliation," he said.

The video drew massive anger after it was leaked last year and threw the spotlight onto the state of South Africa's post-apartheid race relations after the fall of white minority rule in 1994.

Despite the university's decision, the four students are still due to go on trial in a criminal court on October 26 charged with violating the workers' dignity.

"Complainants in the case are the victims not the university, therefore it won't affect the criminal case against the accused," prosecuting authority spokesperson Muthunzi Mhaga told AFP on Saturday.

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