Funding for teaching at England's universities is being cut by 1.36% next year to save ￡65m.

Every university is affected by the revised grant allocations from the funding council (Hefce).

But the biggest cuts are at those with the most students: ￡2.5m at the OU, ￡1.4m at Manchester, ￡1.2m at Leeds.

Unions reacted angrily but the Department for Business, Innovation and Skills (Bis) said the sector had to tighten its belt like everyone else.

The University and College Union (UCU) said the ￡65m would equate to the loss of a further 1,500 full time lecturing and support staff, days after it had complained at nearly 6,000 cuts affecting 100,000 students.

'Disgraceful'

UCU general secretary Sally Hunt said this was just the first wave of likely new cuts.

"What kind of message does this send out to future generations of educators?

"It seems absurd that in a week when the government has done so much soul searching over widening participation that it is putting up new barriers for people wishing to study."

The news would come as "a hammer blow" to staff and students, she said.

National Union of Students president Wes Streeting said: "It is disgraceful that the quality of teaching in our universities is going to be compromised by significant cuts to the teaching budget.

"Any savings should be made from peripheral areas of the sector, not from the bread and butter of teaching itself."

In a time of economic crisis, it was essential to maintain high standards in higher education so people could improve their skills or retrain to meet the changing demands of the labour market, he added.

The chief executive of the vice-chancellors' organisation Universities UK, Diana Warwick, said: "We said back in May, when the secretary of state first outlined this ￡65m cut, that this was a blow to institutions, not least in that the detail of the institutional allocation would not be available until now, so late in the year.

"This has made planning for the year ahead, 2009-10, all the more difficult in what is already a very challenging financial climate."

She said a properly funded higher education sector was vital if it was to continue to make a substantial contribution to the UK economy and to remain internationally competitive.

Extra places

The impact of the teaching funding cuts will be compounded by this week's announcement that universities in England can recruit another 10,000 students this year - but will not be given any funding for teaching them.

These are for full-time undergraduate student places for 2009-10, in courses which the government says will equip young people with the skills they need for the jobs of the future.

It says this means sectors such as digital industries, the low carbon economy and advanced manufacturing and business services.

Priority course areas are:

Biological and related health sciences (excluding psychology, sports science and those that are primarily practice-based) ; Physical sciences (excluding geography); Mathematical and computer science; Engineering; Technology; Economics; Business studies; Business Secretary Lord Mandelson is expected to make a speech on the future of higher education early next week.

This is likely to set the tone for the forthcoming review of student finance - promised to Parliament when "top-up" fees were brought in - and of higher education more generally.

(www.eduwo.com, Jainlyn&Charlotte)