European Union funding of universities could increase dramatically between 2007 and 2013 under proposals released this week by the European Commission. But the Commission controversially threw its weight behind tuition fees.
In a policy paper on higher education, Brussels says universities should receive a much increased share of the EU's structural funds. The increased share could translate into millions of euros.
The Commission's intervention coincides with negotiations between EU governments over the budget for 2007-13, a decision the current Luxembourg presidency wants made in principle by June.
It follows hard on the heels of Commission proposals for a massive boost in research funding through the e67 billion (£46 billion) Seventh Framework Programme, more than twice the size of FP6 budget.
There are fears that if the decision is not taken before Britain takes over the EU presidency in July, the launch could be delayed beyond 2007.
Labour MEP Eluned Morgan warned that it would be difficult for the UK Government to broker a deal over the funding proposals.
David Coyne, the Commission's Education and Culture Director, told The Times Higher that extra cash was vital to enable universities to help Europe reach its Lisbon strategy goals on competitiveness. "We should invest enough to enable them to reform and to invest in change and modernisation," he said.
The policy paper, Mobilising the Brain Power of Europe , also calls for the EU's largest financing institution, the European Investment Bank, to expand initiatives to fund higher education. The Council of Ministers should tell member states to boost the autonomy and financing of universities, it says, and to step up the search for private funding.
The paper urges universities to be more responsive to the private sector, saying they should orient research, training and course mix more to the needs of the economy and business.
On fees, the Commission highlights evidence that low fees deter applications from poor students in the short term while improving the attitudes of students and lecturers. Mr Coyne said such gains would be maximised if some fee revenue ensured that "students from less well-off backgrounds can study".
The moves towards self-financing would cement the devolution of power to European universities, the paper says, especially in southern Europe, where ministerial countersignatures are often required for key decisions.
Commission officials will press EU ministers for a mandate to benchmark progress in all these areas to highlight problems and to promote good practice exchanges from countries that have it to those that need it. The policy paper itself would also exert some "soft power", Mr Coyne suggested, by providing an extra lever for like-minded ministers to fight their corner.
A linked commission working paper, released the same day, includes data confirming the EU's comparative lack of investment in higher education. It spends 1.1 per cent of gross domestic product, similar to Japan's level, but less than Australia (1.5 per cent), Canada (2.5 per cent) and the US (2.7 per cent).
Ms Morgan warned that if no deal were struck on FP7 by the end of June, there would be a gap in EU research funding and a possible exodus of European scientists to the US, further denting the Lisbon strategy.