London Metropolitan University could lose millions in research funds, threatening jobs, as the union boycott over new staff contracts becomes increasingly bitter.
The union is intensifying action with a strike call for next Wednesday just as thousands of freshers arrive for their induction week.
Brian Roper, the vice-chancellor, warned this week of a "stark" financial situation with serious implications for jobs if the strike turned students away.
"We are not a wealthy institution," he warned. "We are expecting thousands of freshers. If they decide not to stay the financial implications will be stark."
In a bizarre twist, it also emerged this week that the boycott by lecturers' union Natfhe was likely to impact hardest on the university's collaborative research with trade unions.
London Metropolitan's Working Lives Research Institute is home to the respected Centre for Trade Union Studies and the TUC archives. The university also hosts the prestigious Women's Library.
Earlier this year Steve Jeffries, director of the Working Lives Research Institute, and deputy director Mary Davis warned Mr Roper that the centre could lose about £2 million in grants from trade unions and other partner organisations due to the boycott.
Professor Davis said: "We are all hanging on by our fingernails, desperate not to jeopardise jobs. This boycott is having a differential impact on us because trade unions are fully supporting it."
Mr Roper said: "It would be deeply regrettable if we lost this money. This is not an anti-union university. We have worked hard to establish research in this field and have been hugely successful."
He said that it was too early to say what impact the loss of trade- union funds would have on overall university finances. Mr Roper said he was willing to talk to Natfhe to resolve the dispute.
But Jennie Golden, Natfhe representative, said that the terms on which the university was prepared to talk were unacceptable.
The Social History Society has also advised its members to boycott the university. In a letter to Professor Roper in June, the society, whose president is Lord Briggs, former Provost of Worcester College, Oxford, said that the executive committee had decided unanimously to support the boycott.
"This has been a serious decision for us to take, given the importance of the research resources at the Women's Library to so many social and cultural historians," it said.
Mr Roper's comments this week contrast with his earlier views on the seriousness of the boycott. Earlier this month, he wrote to governors saying that the impact of the academic boycott had been "minimal save in one respect - disruption of the student assessment process".
The letter said that initially 470 of the 500 external examiners had performed their duties normally. Of these, just six external examiners persisted with the boycott after the university reminded them of their contractual obligations.
Mr Roper said the university had engaged alternative examiners and that all the work should be completed soon.
But, Amanda Sackur, a Natfhe representative and lecturer in governance and international relations, said: "In my department alone we have four external examiners who are abiding by the boycott, and that is just for one campus of the university."
The dispute centres on management attempts to introduce a uniform contract across the university, formed two years ago when North London University merged with London Guildhall. Natfhe is fiercely opposed to the North London contract.