Cambridge and Oxford have climbed to second and third places in the latest world rankings and have almost closed the gap on Harvard, the world's number one.
The 2006 World University Rankings, published today in The Times Higher , show that Harvard's lead has fallen from 13 per cent in 2005 to just over 3 per cent.
Ian Leslie, pro vice-chancellor for research at Cambridge, said: "The collegiate systems of Cambridge and Oxford continue to be valued and respected by peers, and the excellence of teaching and of research at both institutions is reflected in this ranking."
Several other UK universities improved their positions, including a batch of London institutions.
Imperial College is up from 13th to 9th this year, University College from 28th to 25th and King's College is up from 73rd to 46th.
Glasgow and Birmingham universities made it into the top 100 for the first time.
Richard Lambert, director-general of the Confederation of British Industry, whose 2003 review of UK industry-university links suggested the idea of university rankings, said: "It is very pleasing that British universities are doing so well in these rankings.
"But higher education is becoming more competitive and they must go on raising their game."
He pointed to Beijing University, ranked 14th, as an example of the emerging Asian challenge for UK and US institutions.
The most important measure in the ranking is peer review, carried out among more than 3,000 academics around the world. Cambridge and Oxford were first and second on this measure.
- World University Rankings 2006 online: