Poor pay in London is threatening the government's target for half of people under 30 to experience higher education by 2010 and could discourage overseas students, London's vice-chancellors have warned.
The London Higher Education Consortium, comprising 40 London institutions, expressed its concern in a letter to the higher education minister, Margaret Hodge.
The letter, seen by The THES , says: "London's universities and colleges are little different from the public sector at large in experiencing severe difficulties in recruiting and retaining staff, and for the same reason: salaries are uncompetitive with the commercial sector at a time of severe shortage of affordable housing across the capital.
"The consortium considers that allowing the difficulties to continue will severely jeopardise the ability of institutions to respond to the government's 50 per cent of the UK cohort in higher education challenge and to sustain the appeal of London for overseas students.
"London teaches about 19 per cent of England's students. Many of them are drawn from the London area, so any adverse impact on the effectiveness of London's higher education could seriously complicate attainment of the government's 50 per cent participation target.
"One-third of overseas students in England also study in London; their loyalty to London as an international brand leader for higher education cannot be taken for granted."
The consortium based its warning on a report that found that the ratio of house prices to salary is three times higher in London than in the north of England.
Other London difficulties include: higher overall living costs; the quality of schools compared with other university cities; and local transport difficulties.
Peter Mitchell, assistant general secretary of the Association of University Teachers, said: "We think there is a very powerful case for the London weighting to increase.
"House prices have gone up by more than 100 per cent since we last had an increase in the London weighting in pre-1992 universities."
Staff in the old universities get an annual London allowance of £2,134 while those in new universities get between £602 and £2,353, depending on their London location.