The crackdown, imposed on Edinburgh University students by their union leaders, has been branded “ridiculous” and a “joke”.
Other prohibited costumes include Mexicans, gangsters, mental patients and “camp men”.
The Edinburgh University Students’ Association (EUSA) has previously been criticised for excessive political correctness, introduced the rules following a series of scandals involving students “blacking up”.
Students have been told: “You may not intend to hurt anyone when picking out your costume, and you may not even think there’s a problem, but it’s important to consider the impact your choices will have.
“It is also not acceptable to use props to emphasise racial characteristics in order to convey an individual or character. A good costume should be clear enough that you do not need racial or cultural additions.”
The guidance has prompted a backlash from many students as well as from Spiked, an online “humanist” magazine, which posted an image of a child dressed as a gangster writing, “Who’s afraid of this little guy?”.
Charlie Peters, 19, a philosophy student at Edinburgh University has started an online petition asking the institute to reinstate free speech.
He said: “It’s a bit of a joke. We have a national approach of strict laws in censorship of speech. The uni has taken that and gone beyond and to absolute extremes.
“I’m sure their intentions are nice, but it takes away the potential to speak freely.”
Edinburgh was recently ranked as one of the most “ban happy” universities in Spiked magazine’s, Free Speech University Rankings 2016.
Tom Slater, the coordinator of the rankings, said: “The university that produced David Hume is banning fancy dress.
“Edinburgh was among the worst universities we assessed nationwide. The Edinburgh Union Students’ Association, in particular, has outdone itself.”
He added: “Our research shows that in Scotland - as it is across the country - campus censorship is hitting epidemic proportions.”
Previous bans made by EUSA have included social media site UniLad, Page 3 and Robin Thicke’s hit, Blurred Lines from being played on campus.
In 2013, The Edinburgh University Law Society were forced to justify their actions after four students “blacked up” to represent Somali pirates during a drinking event.
EUSA President, Jonny Ross Tatam, said their policies are intended “to broaden free speech, not restrict it. We’re committed to ensuring everyone feels able to participate in debate and discussion within our venues.”
Dundee University has also faced criticism after banning Pro-life groups in 2014 - despite them having their own stall on campus for years before.
And Stirling University introduced a policy to not “share a platform with any organisation deemed to be racist or fascist by the National Union of Students.”
Last year the University of Stirling banned four of their football teams from training or playing after dozens of students painted their faces black to watch the African Cup of Nations tournament in a local pub.