Lecturers' leaders claim that academic staff are being forced to pay with their jobs after Bournemouth University's managers lost almost £1 million in a property venture.
The Bournemouth branch of lecturers' union Natfhe this week joined students in demanding a full review of how the university spent £934,000 on plans to develop a town-centre campus before learning that the land could not be developed because the local council planned to build a road through the site.
"There is a great deal of anger among staff here," said David Heathcote, Natfhe branch chair. "The university is making staff cuts after declaring the first deficit in its history and predicting a deficit of £750,000 for the current year. The £934,000 the university lost relates directly to this."
Mr Heathcote said the union knew of at least three compulsory redundancies at the university.
In an email to staff, Gillian Slater, Bournemouth's vice-chancellor, says the university posted its first deficit ever for the year to July 2003, and acknowledges that this was largely as a result of "our efforts to invest significantly in our estate".
The university confirmed in its annual accounts that it spent £934,000 on a development at Ocean Gate in Bournemouth before the scheme was abandoned because of planning constraints.
A spokesman said: "While the money invested in the scheme is significant, it is not unusual to spend this sort of amount in taking a large scheme through the architectural design, site investigation and legal processes to final planning consent.
"The university sought to safeguard its interests at all stages of the development. It also ensured that the site itself was not purchased until planning consent had been obtained. The university has avoided purchasing a piece of land that subsequently could not be developed economically."
He said the university was seeking legal advice on the recovery of its costs.
But the spokesman said that the projected deficit for this year and the current cuts had nothing to do with the Ocean Gate scheme.
He said: "The money we spent on Ocean Gate affected last year's budget, and it came out of our reserves. The current situation relates to our operational budget for this year and relates to investment in entrepreneurial ventures that have not yet made a return."
In her email to staff, Professor Slater says that figures from the first three months of the current financial year show that the university is about £1 million short of its £69 million income target.
She says that the university had to take £1 million out of its expenditure, largely through "very tight control of staff recruitment", and that staff costs had grown faster than income.
Michael Riordan, director of human resources, said: "The university has a strategy to reduce its staff costs. That strategy is seeking to achieve any reductions in staffing through natural wastage."