Oxford University's department of medicine has a Pounds 400,000 deficit despite attracting outside research grants worth more than Pounds 10 million, ministers heard last week.

The debt means that there is plenty of money for ambitious research projects but none for basics such as heating, lighting and cleaning, said John Bell, head of the department.

His complaint is the latest in a battle over who should pay overhead costs at university research departments. The major charities have refused to include such costs in their research grants, saying that the money should be paid by the universities.

"The truth is that the whole programme is suffering. This is quite a serious crisis," Professor Bell said. The Wellcome Trust recently opened its centre for human genetics at Oxford at a cost of Pounds 25 million. "Things are just not happening in the new Wellcome centre because of lack of infrastructural support," he said.

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Last week he gave evidence to Virginia Bottomley, Secretary of State for Health, and David Hunt, Chancellor of the Duchy of Lancaster, when they visited the Wellcome Trust to discuss brain drains and losses. The ministers said Britain is attracting medical scientists rather than losing them.

The trust assembled ten leading scientists from abroad. David Gordon, programme director at the trust, said: "You can't expect to attract good people from abroad without providing the inevitable substrate."

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The scientists also called for improvements in salaries and career structures if researchers were to be attracted from abroad. Professor Bell, a Canadian who studied at Oxford before developing his research in the United States, said that he was trying to attract professorial-level scientists who would be leaving salaries of $100,000, (about Pounds 64,000). "But I can't get anybody appointed here on more than Pounds 30,000".