Swansea, Bangor and Aberystwyth universities will also lose a significant proportion of their places after HEFCW rubber-stamped a controversial new method of allocating funding.
In January the funding council announced that from 2013-14, 53 per cent of Welsh student places in non-priority subjects will be removed from "general allocations" to create a "margin".
Half of the margin will be reallocated to institutions charging less than £7,500 a year, while the rest will be distributed on the basis of Welsh government priorities: universities' research income, total income, overseas student cohort and number of spin-off companies.
The new system has forced five Welsh universities to cut their tuition fees to below £7,500: the University of Glamorgan; the University of Wales Trinity Saint David; Cardiff Metropolitan University; the University of Wales, Newport; and Swansea Metropolitan University.
Despite this move, Newport and Trinity Saint David will still lose full-time undergraduate and PGCE new entrant numbers because they are allocated so few places in line with Welsh government priorities.
HEFCW allocated an additional 200 places to Trinity Saint David and Swansea Metropolitan because the two were close to completing the merger recommended by Welsh education minister Leighton Andrews.
A spokesman for Newport said that the university was “deeply disappointed” with the decision, which will see places fall by 20.4 per cent.
“Despite our constructive approach where we offered to work with HEFCW to overcome what we believed was an unintended consequence of their plans, they are forcing through a cut of 20 per cent in full time student numbers in Gwent,” he said.
“We will be convening emergency discussions in order to consider our response and the impact that this announcement will have on the university, and how this affects our position in terms of the minister’s proposals for the reconfiguration of higher education in South East Wales,” the spokesman added.
Mr Andrews is pushing for a merger between Newport, Glamorgan and Cardiff Metropolitan, which the latter opposes.
Aberystwyth is set to lose 20.6 per cent of its places, while Bangor (9.5 per cent) and Swansea (10.8 per cent) are also set for deep cuts in their numbers.
HEFCW has stressed that each university will receive more overall funding for full-time undergraduate and PGCE students by 2014-15 than if maximum tuition fees had not been raised to £9,000.