Government proposals to cap income tax relief on charitable donations risk undermining the tradition of philanthropy in higher education, Oxford University officials have warned.

The university fears the cap, announced in the Budget last month, could deter donors from backing research.

Vice-chancellor Andrew Hamilton is understood to have told Chancellor of the Exchequer George Osborne warning the plan “risks undermining the culture” of philanthropy. University spokesman Ruth Collier, said: “We are certainly concerned about the potential impact in higher education, where the Government’s own policy emphasises the role of private and philanthropic investment, rather than the public purse.

“A step that penalises the Government’s own approach seems ill-considered. Our Oxford Thinking fundraising campaign recently passed its initial target of £1.25bn and we are continuing to seek support. The generosity of Oxford’s donors provides huge public benefit, contributing to teaching, research and bursaries.

“We have done our best, along with other universities and charities, to foster a culture of giving in the UK, and this move risks undermining that culture.”

In 2010-11, the last year for which figures are available, £248m was raised by the university and its colleges, including several multi-million-pound donations.

The Budget proposes setting a cap at 25 per cent of income for anyone seeking to claim more than £50,000 of tax relief a year.

Treasury Minister David Gauke insisted the Government stood by the broad principle of the cap, in order to stamp out abuse by wealthy people using tax relief to minimise income tax payments.

But after Prime Minister and Witney MP David Cameron said he was “very sympathetic” to the concerns raised by charities, Mr Gauke said ministers were looking at how it would be implemented.