Three of Berlin's universities are threatening to close their doors to first-year students this year after it was announced that their subsidies would be cut by almost €200 million (£140 million) a year.
The move will affect some 5,000 new students at Berlin's Humboldt, Free and Technical universities and will be the first such action in Germany.
Humboldt, which houses Europe's biggest medical faculty, said that if the local government did not reconsider the planned reductions in subsidies, it would have to close its doors to new students.
Humboldt spokeswoman Heike Zappe said: "The only way we could meet these savings is to cut personnel costs. This in turn means the number of students we could teach would have to be slashed. The only way around it would be not to accept any new intake in October."
Claus Guggenberger, spokesman for Berlin's senate finance department, said:
"The city of Berlin has debts amounting to over £32.7 billion.
Unfortunately we have to make savings in all areas, not just in the higher education sector."
He added: "The decision to close the universities to first-year students is a matter for the senate department of education and not for the universities themselves."