Higher education funding pressures are now so severe that some Scottish institutions may not survive, the Committee of Scottish Higher Education Principals has warned.
In its submission to this year's public expenditure survey, COSHEP says there is great concern among governing bodies over "very seriously inadequate" public funding.
"Some institutions may have to divert more of their energies away from their core teaching and research functions in favour of other compensating and potentially more 'profitable' activities," COSHEP said.
"Other institutions, less fortunate, may simply no longer be financially viable."
It warns that universities and colleges are already poised to axe courses. They are reviewing the range of subjects which they can continue to offer, which COSHEP says will certainly lead in some cases to a reduced number of subjects available at honours level, and probably restrictions on the options offered within subjects.
It bluntly states that unless more funding is forthcoming, institutions will not be inclined to expand again after the current period of consolidation.
The submission quotes Lord James Douglas-Hamilton, Scottish Office minister for education, reasserting that the Government wants "more for less" and that he makes "no apologies" for it.
"For our part, we make no apologies for repeating our view that we will resist further growth if we continue to believe that even more will have to be achieved for even less and, above all, that the Government's own declared objective 'to support the enhancement of quality' may be the ultimate casualty."
Remarkably, higher education has made real and permanent achievements over the past ten years in the face of relatively under-funded growth, and is so central to the Scottish economy that any significant funding cut is bound to hit the nation's economic health, the submission says.
The damage could be incalculable if Government indications of more money for nursery education and schoolteachers' salaries simply resulted in existing education funds being redistributed, with higher education emerging as the loser.
It also calls for extra funds for information technology, allowing colleges and universities to buy high-quality teaching materials.