A more centralised way of planning Switzerland's universities has been proposed by the federal government and is being debated by MPs.
Legislation based on proposals from the federal office for education and science and the Swiss Science Agency is before parliament, with a final decision expected in May. The proposals have the conflicting objectives of simultaneously increasing cooperation and competition between universities.
Crucially, they pave the way for a new deal between federal government and the cantons, and the creation of a new Swiss University Conference with decision-making powers.
In line with the country's commitment to devolved democracy, Switzerland's ten main universities have historically been cantonal rather than federal institutions.
About 90,000 students are enrolled at the ten universities and two federal institutes of technology. The increase in recent years has levelled off after steady growth between the mid-1960s and the early 1990s. Numbers increased by 18 per cent over the ten years from 1985-95 but there was no need to introduce a numerus clausus.
Swiss universities have avoided the overcrowding seen elsewhere in Europe, remaining modest in size. Zurich is the largest, with 20,000 students and Geneva second, with 12,000.
Research performance is strong - surveys of citation indices place it high in international league tables. So why a shake-up of a system that seems to be working well and attracting a strong inward flow of international students - about one-fifth of the total, with 37 per cent of all postgraduates from overseas?
Hans Beck, president of the Swiss Universities National Planning Commission, said that the government was concerned at excessive democracy in decision-making and the slow rate of transfer of technology into the economy.
There is also the consequence of the 1992 referendum on European Economic Area membership, which might have meant Switzerland's formal exclusion from schemes such as Erasmus, the EU's student mobility programme, and EU research initiatives.
Pragmatically, the Swiss government simply encouraged universities to become "silent partners", underwriting the direct costs from federal funds, and concluded bilateral agreements with its neighbouring EU member states. Slightly more Swiss students take part in Socrates and Leonardo programmes than flow the other way. The cost to Switzerland of the transitional arrangement has risen from SFr4.4 million (Pounds 1.9 million) in 1996 to SFr6 million in 1998.
Overall, as in other countries, there is concern at meeting the costs of growing demand against a background of unspectacular economic performance. The government insists that future federal subsidies should be based on four-year development plans, and at its instigation in 1996 the universities drew up a strategic plan for the ensuing ten years. This was followed in 1997-98 by a four-year plan for 2000-03.
Approximately a fifth of the operating costs of the cantonal universities is met by the federal government, which also pays investment grants covering 35-60 per cent of construction and equipment costs and for student exchanges and academic mobility with the rest of Europe, including the EU. Student fees are about SFr500 a semester.
Collaboration is already being explored, with harmonisation of courses between Berne, Fribourg and Neuchtel, while Geneva and Lausanne are aiming for closer collaboration short of a merger.
Student numbers are to increase by 20 per cent between 1998-99 and 2005. Federal funding, which is likely to grow only slightly, will be tied to outputs such as graduate numbers and volume of research. It will encourage greater competition in research, while rewarding local and regional networks.
An Institute for Quality Assurance is also promised. Swiss ministers and officials were in the Netherlands this month to discuss the mechanisms in place there that tie quality to funding.
Professor Beck told British vice-chancellors on a British Council-sponsored study tour this month that Swiss universities were ready to meet the challenges of the millennium. But he added: "Universities should not be reduced to the status of factories with students as inputs and graduates as outputs."
There are already signs of some resistance - the Swiss rectors have produced counter-proposals to the quality assurance regime. But it is unlikely that the legislative package can be unpicked. One element is a refined fee-adjustment scheme under which cantons without universities meet the costs of their students in cantons with universities. It is a three-banded scheme that recognises the varying costs of library-based, laboratory-based and medical courses.
The rectors want a "new blood" scheme for faculty, planned to create 300 substantive posts in the period 1992-99, a third of which are for women, to continue.