Chris Patten, chancellor of Oxford University, has spoken out against the institution going private, arguing that the Government must ramp up funding for its "enormous national assets".
Speaking before his first public address on the future of science and universities last Thursday, Mr Patten said that he would like to see Oxford raising significantly more income privately.
But he confirmed that opting out of state control completely would not be his preferred option, contrary to the views of many of his senior colleagues at Oxford.
Mr Patten said: "Tertiary education represents the public good and should receive public support." But he suggested that he was in favour of a move to place more emphasis on graduate education at Oxford.
He said: "I'm sure we will finish up positioning ourselves closer to the balance (of students) in Ivy League universities."
Mr Patten complained that the Government was failing to give British universities the credit they deserved for being second in the world, behind the US.
He said: "If we were coming second in the Olympics, imagine the gold that would rain down. It makes you think we would be better off running a basketball team than a university."
He told an audience at the annual meeting of the Save British Science campaign group that universities had not been, and were not about to become, a Government spending priority.
Mr Patten welcomed the introduction of top-up fees but warned that the £3,000 cap was so low that it could not transform university funding.
He added: "There is no guarantee that the Treasury will add fee income to the annual university settlement. Experience suggests that it will simply dock one from the other, whatever it says now."
Mr Patten stressed that Oxford's new animal research facility, on which construction work has been halted because of intimidation by animal rights extremists, would go ahead.
He said that the targeting of universities by extremists "should not be allowed in a free society".
But he called on other Russell Group institutions to join Oxford in being more open about research using animals.