OXFORD's two universities today urged the Government to protect higher education funding as it looks to save billions of pounds.

Professor Andrew Hamilton, the outgoing vice-chancellor of Oxford University, and Oxford Brookes University vice-chancellor Professor Alistair Fitt said they were concerned about "uncertainties" facing universities.

Their intervention comes as the Department for Business, Innovation and Skills (BIS) – which covers universities – faces making cuts of up to 40 per cent as part of a wide-ranging spending review.

The review is due to be published next month, but there are concerns it could recommend cuts to research funding and further reductions to university grants.

In his final annual speech to Oxford University earlier this afternoon, Professor Hamilton warned "politicians do not fully understand or appreciate what a jewel they have in British higher education, they risk throwing it away".

He said: "The looming comprehensive spending review, coupled with the prospect of changes to the research council system, and perhaps to BIS, points to a more than usually uncertain and challenging period.

"Of all the false economies that might be available to ministers, few could be more mistaken than cutting support for universities and their research.”

Professor Hamilton, who will stand down from his position at the end of this year to become president of New York University, said threats to universities included stricter visa controls affecting students and academics and the risk of high tuition fees driving away poorer students.

He added: "You will usually find four UK universities in the world’s top 20 or so.

"That is remarkable for an island of this size and it is hard to think of any other walk of life where the UK is so eminent. This success often seems to go unremarked."

And his comments were echoed by Prof Fitt, who told the Oxford Mail that Oxford Brookes boosted the economy by more than £1m a day.

He added: "There continue to be a number of uncertainties around the future direction of the higher education sector and particularly so ahead of the forthcoming spending review.

"The country can be justly proud of UK higher education’s reputation and impact locally, nationally and internationally.

"We are urging the Government to protect funding for universities which have been shown to provide great value.

"The impact of universities is more than just monetary and the societal benefits are such that it is crucial higher education is not taken for granted."

A spokeswoman from the Department for Business Innovation and Skills declined to comment.