Today's cash-driven managerial ethos is being blamed for course cuts and the curbs on blue-skies thinking

The Government must act to safeguard the future of vital science subjects in UK universities, says a fiercely worded report from MPs on plans to close the chemistry department at Sussex University.

"There is a real disconnect between the Government's desire to allow universities to act autonomously in a market-driven system and the need to protect strategically important science," said Phil Willis, chairman of the Science and Technology Select Committee.

The report, published this week, says: "It is extremely unfortunate that in an area of higher education so crucial to the nation's future industrial strength, there is now an acknowledged policy failure."

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The report is also highly critical of the lack of powers available to the Higher Education Funding Council for England. "Hefce is supposed to identify and address instances where the individual interests of universities do not coincide with the national interest," it says. "In practice, it has not the teeth, the tools, nor the will to do this effectively."

Mr Willis described Hefce as a "toothless tiger in the jungle".

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Hefce responded promptly with a statement saying that in certain circumstances it might want planning powers.

"Those circumstances would be if we could not rely on HEIs (higher education institutions) to work with us at an early stage in the development of their thinking to ensure adequate provision of a subject at a regional or national level," it said.

"We believe that we should be able to gain assurances from HEIs that this should happen."

The statement said the council would work with the sector to see how it might strengthen existing voluntary guidance.

"If, as we suspect, we are successful, then there would be no need for further powers," it said.

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A number of chemistry departments have been closed in recent years, the latest at Exeter University. As a result of widespread concern, Universities UK reissued guidance encouraging universities to have early discussions with the funding council when planning to close a department considered strategically important.

But the select committee report says Hefce's cautious approach has failed.

It recommends that universities be required to alert the council to proposed closures in science subjects at least 18 months before the changes are due to come into effect.

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The report is highly critical of Sussex, describing its handling of the proposed closure as inept. It places responsibility for the "shrinkage" of the department squarely on the shoulders of Alasdair Smith, the vice-chancellor, arguing that he should have replaced key staff.

The committee also says that the university should have built on the recent upturn in the number of applications for chemistry and consulted far more effectively. The university is reassessing its plans and, as The Times Higher reported last week, the review is expected to recommend a U-turn.

Sussex's strategy and resources committee will discuss the review this week.

A statement from the university said it rejected all but one of the committee's criticisms. It acknowledged that it could have informed Hefce earlier but added that it gave the funding council 16 months' notice - just two months short of the committee's recommendation.

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A spokesperson for UUK said: "Universities are autonomous institutions, and a vice-chancellor's job is to make the right decisions to enable his or her institution to deliver excellence - and these can sometimes be tough decisions."