The University of Leeds is to cut hundreds of jobs in a bid to save £35 million a year by 2011.
The head of each school at Leeds has been asked to draw up a new academic and financial strategy showing how they could deliver savings of up to 20 per cent under a new "economies exercise".
Michael Arthur, vice-chancellor of Leeds, asks them in an email to analyse their departments' activities and indicate "to what extent the activity might realistically be scaled down, discontinued or delivered in a different way". Where activities do not "pay their way", the schools will have to provide "good academic reasons" for why they should be subsidised, he adds.
Professor Arthur has said that the precise number of job reductions is not known, but it "will be significant".
A member of staff, who asked to remain anonymous, said that Leeds had uncovered a financial planning error that left it with £20 million less to spend than previously forecast.
The university has admitted mistakes but said the savings would be required in any case.
"Two errors in our historical financial forecasts mean our forward plans were more optimistic than they should have been," a Leeds spokeswoman said.
"But even if our forecasts had been more accurate, we would still be seeking these economies."
The move follows a voluntary redundancy exercise that has seen dozens of staff leave Leeds this year.
The University and College Union said that up to 700 more posts could be lost.
"The union, together with Unison and Unite, has requested an urgent meeting with the vice-chancellor," a UCU spokesman said.
"However, given the events of the past few days, it seems that a dispute between the UCU and the university is inevitable."
Meanwhile, at Swansea University, the union is protesting against plans that could see 12 staff lose their jobs at the School of Environment and Society.
If they are made redundant, Swansea's 90-year policy of no compulsory redundancies would come to an end, the UCU said.
A university spokeswoman said that no decision had been made.