Trade unions have said the number of redundancies now planned at London Metropolitan University "defies belief", after the figure was upped from 330 to 550 full-time equivalent posts.
According to London Met's University and College Union branch, this could mean as many as 700 - or one in four - of the university's employees losing their jobs.
In an email to staff on 19 February, Brian Roper, the vice-chancellor, proposed reducing staff numbers by up to 550 by July 2010.
"Approximately 330 of these posts are anticipated as being achieved through either voluntary or compulsory redundancy, with the remainder coming from anticipated natural turnover," his message reads.
The university's board has approved plans for a fourth voluntary redundancy scheme, under which payments "represent the maximum possible ... affordable within the university's financial constraints".
Mr Roper writes: "The board also delegated to me the final allocation of staff post reductions across departments."
A consultation has been launched that aims to identify ways of "avoiding or mitigating" the need for compulsory redundancies, and the university's trade unions and staff representative council have been formally notified.
As first reported in Times Higher Education in July 2008, the Higher Education Funding Council for England has reduced London Met's grant for 2008-09 by £15 million after it discovered the university had made incorrect data returns.
In January, it emerged that the funding council also planned a clawback of the money the university was overpaid between 2005 and 2008. London Met's UCU branch said this could amount to an additional £38 million.
In his email, Mr Roper says: "I feel it is important to assure you that at no time has there been any deliberate miscalculation or impropriety on the part of London Metropolitan University. The exact amount to be repaid, and the period over which it will need to repaid, will not be known for some time."
Staff and students have been holding protests against the cuts, and 2,300 people have signed a petition on the national UCU website.
A spokeswoman for London Met said: "In our early discussions with our recognised trade unions, we signalled that a reduction of between 330 and 550 posts was likely to be necessary."