The vice-chancellors of Northern Ireland's two universities are demanding a rethink of spending plans after the power-sharing executive's draft budget included no boost for research.
In a strongly worded joint statement, Sir George Bain of Queen's University Belfast and Gerry McKenna of Ulster University said they were shocked by the proposals.
The Department of Employment and Learning has been given a 6.2 per cent increase in the province's £7 billion allocation, with some funds earmarked for student support but none for research.
The vice-chancellors have called for an urgent meeting with employment and learning minister Carmel Hanna. Despite strong support from Ms Hanna and her department, they said, the compelling case for proper investment in higher education had been ignored.
"It is crucial that these proposals are re-examined. Queen's and the University of Ulster researchers are the cornerstone of Northern Ireland's economic infrastructure. The executive is in danger of making short-term spending decisions at the expense of Northern Ireland's medium and long-term future," they said.
"We had hoped devolved government would mean a greater sense of urgency and more imaginative thinking in regard to the role of our universities in the regeneration of Northern Ireland."
They warn that the province is being further disadvantaged compared with other parts of the UK. Block government funding for Northern Ireland research dropped in real terms by 20 per cent between 1992-93 and 2000-01, compared with a 23 per cent increase for universities in Great Britain.
But student leaders have praised the budget proposals as a "major victory" in the fight against student poverty. These would raise the full bursary for poorer students from £1,500 to £2,000. The income threshold for those qualifying for a bursary would also rise, potentially benefiting an extra 3,000 students.
A spokesperson for the National Union of Students-Union of Students in Ireland said: "NUS-USI hopes that the forthcoming UK white paper on student finance will also be as forward thinking. Cash-strapped students cannot pay for increased funding in the higher education sector."