diff --git a/src/V3LinkDot.cpp b/src/V3LinkDot.cpp
index 1b39283f8..a654141b8 100644
--- a/src/V3LinkDot.cpp
+++ b/src/V3LinkDot.cpp
@@ -779,14 +779,51 @@ public:
         if (!foundp) baddot = dotname;
         return foundp;
     }
+    static bool checkIfClassOrPackage(const VSymEnt* const symp) {
+        if (VN_IS(symp->nodep(), Class) || VN_IS(symp->nodep(), Package)) return true;
+        const AstRefDType* refDTypep = nullptr;
+        if (const AstTypedef* const typedefp = VN_CAST(symp->nodep(), Typedef)) {
+            if (VN_IS(typedefp->childDTypep(), ClassRefDType)) return true;
+            if (const AstRefDType* const refp = VN_CAST(typedefp->childDTypep(), RefDType)) {
+                refDTypep = refp;
+            }
+        } else if (const AstParamTypeDType* const paramTypep
+                   = VN_CAST(symp->nodep(), ParamTypeDType)) {
+            if (const AstRequireDType* const requireDTypep
+                = VN_CAST(paramTypep->childDTypep(), RequireDType)) {
+                if (const AstRefDType* const refp = VN_CAST(requireDTypep->lhsp(), RefDType)) {
+                    refDTypep = refp;
+                } else if (VN_IS(requireDTypep->lhsp(), VoidDType)
+                           || VN_IS(requireDTypep->lhsp(), BasicDType)
+                           || VN_IS(requireDTypep->lhsp(), ClassRefDType)) {
+                    return true;
+                }
+            }
+        }
+        // TODO: this should be handled properly - case when it is known what type is
+        // referenced by AstRefDType (refDTypep->typeofp() is null or
+        // refDTypep->classOrPackageOpp() is null)
+        if (refDTypep && !refDTypep->typeofp() && !refDTypep->classOrPackageOpp()) {
+            // When still unknown - return because it may be a class, classes may not be
+            // linked at this point. Return in case it gets resolved to a class in the future
+            return true;
+        }
+        return false;
+    }
     VSymEnt* resolveClassOrPackage(VSymEnt* lookSymp, AstClassOrPackageRef* nodep, bool fallback,
                                    bool classOnly, const string& forWhat) {
         if (nodep->classOrPackageSkipp()) return getNodeSym(nodep->classOrPackageSkipp());
         VSymEnt* foundp;
         if (fallback) {
-            foundp = lookSymp->findIdFallback(nodep->name());
+            VSymEnt* currentLookSymp = lookSymp;
+            do {
+                foundp = currentLookSymp->findIdFlat(nodep->name());
+                if (foundp && !checkIfClassOrPackage(foundp)) foundp = nullptr;
+                if (!foundp) currentLookSymp = currentLookSymp->fallbackp();
+            } while (!foundp && currentLookSymp);
         } else {
             foundp = lookSymp->findIdFlat(nodep->name());
+            if (foundp && !checkIfClassOrPackage(foundp)) foundp = nullptr;
         }
         if (!foundp && v3Global.rootp()->stdPackagep()) {  // Look under implied std::
             foundp = getNodeSym(v3Global.rootp()->stdPackagep())->findIdFlat(nodep->name());
diff --git a/test_regress/t/t_class_reference_name_colision.py b/test_regress/t/t_class_reference_name_colision.py
new file mode 100755
index 000000000..147fe6faf
--- /dev/null
+++ b/test_regress/t/t_class_reference_name_colision.py
@@ -0,0 +1,16 @@
+#!/usr/bin/env python3
+# DESCRIPTION: Verilator: Verilog Test driver/expect definition
+#
+# Copyright 2025 by Wilson Snyder. This program is free software; you
+# can redistribute it and/or modify it under the terms of either the GNU
+# Lesser General Public License Version 3 or the Perl Artistic License
+# Version 2.0.
+# SPDX-License-Identifier: LGPL-3.0-only OR Artistic-2.0
+
+import vltest_bootstrap
+
+test.scenarios('simulator')
+
+test.compile()
+
+test.passes()
diff --git a/test_regress/t/t_class_reference_name_colision.v b/test_regress/t/t_class_reference_name_colision.v
new file mode 100644
index 000000000..6ddd27f78
--- /dev/null
+++ b/test_regress/t/t_class_reference_name_colision.v
@@ -0,0 +1,17 @@
+// DESCRIPTION: Verilator: Verilog Test module
+//
+// This file ONLY is placed under the Creative Commons Public Domain, for
+// any use, without warranty, 2025 by Antmicro.
+// SPDX-License-Identifier: CC0-1.0
+
+class setup_coefficients;
+    static function int create();
+        return 1;
+    endfunction
+endclass
+
+class biquad_vseq;
+    int c_setup = setup_coefficients::create();
+    function void setup_coefficients();
+    endfunction
+endclass: biquad_vseq