Divisions within the academy could become "lurid" in the next few years as some institutions weather the difficult financial conditions better than others.
This is the view of Sir Drummond Bone, former vice-chancellor of the University of Liverpool and one-time president of Universities UK.
Speaking at the UK Council for Graduate Education's winter conference in London this week, Sir Drummond said that real-terms reductions and further concentrations of the research budget would affect institutions differently.
It was possible, he said, that some science-heavy research-intensive universities would not experience a significant decline in income. But for institutions with a predominance of arts and humanities provision and those that "recruited rather than selected" students, the next few years could be "extremely fraught".
"We haven't yet been through a really lurid differentiation that is forced on the sector," he noted.
Sir Drummond predicted that the financial climate would lead students to view postgraduate study in a more "utilitarian" manner, which would favour vocational subjects such as MBAs and in-work master's courses. "Whether it will favour PhDs is another issue," he added.
He also worried that the diversification of research income - including money from industry - could make universities more vulnerable than in previous recessions to sudden contractions in income.
Citing pharmaceutical company Pfizer's decision last week to close its research and development facility in Kent, he said: "With quality-related funding, at least you know where you are."
But he said the situation was "not a disaster": "I've been through four recessions in my (career), but there hasn't been one for 20 years. That's the psychological problem: a lot of people haven't experienced one."
Recognition doesn't cost a thing: ESRC's doctoral training plans come under fire
Strong opposition was expressed at the UK Council for Graduate Education's winter conference to a decision by the Economic and Social Research Council to restrict doctoral studentships to just 21 "doctoral training centres", made up of 45 pre-1992 universities.
The ESRC originally intended to accredit an additional network of smaller "doctoral training units", whose students would have been able to compete for studentships. But this was dropped after the ESRC's budget was cut in the Comprehensive Spending Review.
Pam Denicolo, vice-chair of UKCGE, accused the ESRC of drawing an "arbitrary line" on the basis of what it could afford. It should continue at least to accredit universities to help them attract foreign students, she said.
Iain Cameron, head of research careers at Research Councils UK, said the cut-off reflected the level of critical mass that the ESRC deemed necessary for doctoral centres. He said it had chosen to focus on its "strategic priorities", which did not include accreditation. "The councils have to cut 25 per cent off their administration budgets: this has real consequences," he said.
But Professor Denicolo responded: "It wouldn't cost anything to give recognition."