Cash shortage may put squeeze on e-university

The e-university could fall victim to the funding squeeze. An agreement due to be signed today with Sun Microsystems has no cash attached to it and there is doubt over whether the e-university represents best use of public money.

The venture, launched by David Blunkett in 2000, has been described as one of "Fender's follies". Sir Brian Fender, who retired as head of the Higher Education Funding Council for England last month, was a fan of the e-university and has kept his role as one of its directors. It remains to be seen whether it will prosper under Sir Brian's successor, Sir Howard Newby.

It is hoped that a deal with Sun will go ahead today. Sun is already working with schools and wants to move into higher education. But funding chiefs are nervous that the proposed deal might not be clinched. "We have been here before," one said.

Under the deal, Sun would commit staff, including web designers, for 12 months. The aim is for students to access the e-university through an internet browser. Sun would provide the necessary technology, computer systems and specialist software. Meanwhile the e-university would contribute £35 million to this stage of the project.

Once the deal is struck, the BBC and perhaps the British Library could become involved. The e-university would also seek a partner in sales and marketing.