Israeli education minister Limor Livnat has called on the government to drop plans for a 213 million shekels (£30 million) cut in the higher education budget.
The government has cut budgets in all government ministries because of the security situation in the country caused by the intifada.
But the 4 per cent cut proposed for the higher education sector is greater than in many other ministries, which suffered a 1 to 2 per cent reduction.
The minister's demand followed a meeting of representatives of the Council for Higher Education, which is chaired by the education minister.
During an emergency meeting called by the council earlier this month, university and college representatives said that they would not be able to operate with the cut.
The council has demanded that the budget cut be eased from 213 million shekels to 60 million.
Moshe Kaveh, chair of the committee of university heads and president of Bar-Ilan University, said: "We must contribute our part to the security effort. But the finance ministry's demand to impose the steepest budget cut on the higher education system is not moral."