Hundreds of thousands of would-be students will be denied a university place because of spending cuts, says higher education body Universities UK.
Universities' funding body Hefce will later outline how spending on teaching, research and capital will be allocated in England in the next academic year.
For 2010-11, cuts of £135m have been added to "efficiency savings" of £180m - with a further £600m to follow.
Higher Education Minister David Lammy said the fears were "scaremongering".
Professor Steve Smith, president of vice-chancellors' group Universities UK, said the cuts would impact on the quality of teaching, as managers prepared to cut teaching budgets for the first time since Labour came to power.
People agree that This is wasting talent needed for an efficient and successful economy and it's extremely short-sighted. General secretary of the University and College Union Sally Hunt said the higher education system was already creaking under the pressure of government efficiency savings and the planned cuts would be a devastating blow.
This is important to us as college students becuase it could mean that doing a course we want to do at University could be tharwted by spending cuts and not gaining a degree in a profession we want to do in life and be forced to work in minimum wage jobs, and because of a degree becoming more common, it affects what jobs we can get.
General secretary of the University and College Union Sally Hunt said the higher education system was already creaking under the pressure of government efficiency savings and the planned cuts would be a devastating blow.
General secretary of the University and College Union Sally Hunt said the higher education system was already creaking under the pressure of government efficiency savings and the planned cuts would be a devastating blow.
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