A rates revamp could save Northern Ireland's two universities more than Pounds 5 million a year, it has emerged.
Queen's University Belfast and Ulster University are exempt from the local rates relief of up to 80 per cent that is given to other universities in the UK.
But a formal review of rating policy in the province could extend the exemption, even though it would cost local councils millions.
Despite this, Belfast Deputy Lord Mayor Joe O'Donnell is backing the universities' case, although he admits that it could hit the coffers of the main city local authority.
"Our universities should be given rates relief and the British Government should reimburse district councils whatever cash they lose," he argued.
Queen's and Ulster said that discussions with the Department of Finance were ongoing and both universities have requested to be brought in line with their mainland counterparts.
The total bill facing both institutions is about £5.5 million and, without an exemption, this sum is certain to increase substantially as a result of the ongoing overhaul of the province's antiquated rates system.
The outcome of an ongoing consultation is due to be implemented from 2007.
Queen's, based in Belfast, and Ulster, which has four campus sites - in Belfast and just outside the city, Coleraine on the north coast and Londonderry - have been lobbying the British Government over the issue.
An Ulster spokesperson said: "Unlike universities in Great Britain, which receive 80 per cent rates relief, the University of Ulster, like our sister university, Queen's, pays full rates.
"We have made representations on this issue to the authorities, requesting that our position be brought into line with universities in the rest of the UK. Those discussions are continuing."
Ulster said that it could not at this stage provide a list of projects for which the rates relief would be used, but Queen's is currently running a campaign to accrue funding for a redevelopment programme for its Physical Education Centre and students' union buildings, along with a scholarship programme for economically disadvantaged students.
Mr O'Donnell, a Sinn Fein councillor, said: "The adequate funding of educational institutions is essential for the future development of the city. I am calling for a rates exemption for Queen's and Ulster to be applied immediately."
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