Oxford University dons have voted in favour of a string of radical reforms aimed at modernising the way the 900-year-old institution is run.

The Congregation, the University's parliament - comprised mainly of dons as well as some high-ranking administrative staff - has voted for a shake-up in the composition of the university's decision-making body.

Under the reforms, suggested by Vice-Chancellor John Hood, a new academic board would be created to take charge of the day-to-day running of teaching, research and general policy making.

The role of the existing University Council would be restricted to looking after the institution's finances and making sure the organisation complied with the law.

However, instead of being comprised of a majority of university representatives, the University Council would have seven university members and seven external representatives - mainly from the business community.

University Chancellor Lord Patten would probably be the chairman, but following a two-hour debate at the Sheldonian Theatre on Tuesday, Congregation voted in favour of an amendment that he could be replaced - possibly by an external member - after five years.

If an external member took up the chairman's position, it would mean that for the first time an external group controlled the university's financial decision-making.

A second vote is likely to take place on November 28, followed by a postal ballot of the 4,000 Congregation members.

Prof David Womersley, who opened the debate, said: "The passing of the amendment is a body blow for the critics, and shows that the campaign to modernise and reform Oxford governance is on track."

A webcast of proceedings at the next meeting will available on the university's website www.ox.ac.uk