The university of Manchester Institute of Science and Technology has drawn up an ethical policy following a row earlier this year over tobacco sponsorship.
Registrar Paddy Stephenson said concerns raised over a Pounds 50,000 deal with BAT Industries to back a chair in corporate communications had triggered a review of ethical guidelines and a policy had now been agreed by the governing council.
But he stressed the area was fraught with difficulties. "The critical question is whether funds come into the university with strings attached. Basically we should not be accepting money if it interferes with our academic integrity or freedom of action. However, there are considerable grey areas within that principle."
Benefactors presented some complex issues. For example, what if a donor had made money from unethical sources such as arms dealing? What if that had been decades or more ago? Indeed, how would a university know where an individual's wealth had come from?
Companies change hands frequently. UMIST's original sponsorship negotiations with Eagle Star insurance became complicated when the company was taken over by BAT.
"We have to be flexible and judge each case on its merits," Mr Stephenson said. "It's a question of striking the right balance between our public policy commitments and our charter obligations."
These are the key points of UMIST's new policy:
* normally it will accept grants, donations, sponsorship, legacies and other forms of benefactions where it is satisfied that they, and any associated objectives, are consistent with its primary purpose as an education charity. But, as a leading research university, it is likely to be involved in activities which, while legal,are considered by some to be unethical. Such views will notbe allowed to divert UMIST from the pursuit of its primaryobjective.
* it will not accept grants, donations or sponsorships accompanied by conditions that are in conflict with its educational objectives.
* the principal aim of its investment policy is to maximise income from investments. Ethical constraints on its investment agents would therefore not be appropriate.