Sweden faces a shortage of academics due to the fall in the number of doctoral students, the National Agency for Higher Education has warned. The drop in numbers comes as a direct result of a squeeze on Swedish university budgets.

A report from the agency points out that funding levels are so poor that research and the quality of teaching are under threat. In response to dwindling state funds, many universities have cut the number of doctoral students they are taking on. In 2004, the number of students starting a PhD declined by an average of 23 per cent across disciplines compared with 2003.

Since 2004, the decline has continued, the agency reports, although there are no specific figures for 2005-06 yet.

"This is an extremely worrying tendency," the report states, citing lack of funding as the main reason.

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Goran Blomqvist, general secretary of the Swedish Association of University Teachers, said: "It's increasingly clear that universities are being pushed to the limit. We're concerned not only about jobs for our members, but also for the future of our profession."

Research has been so badly hit by the lack of state funding that the agency warns there is a danger that universities will be unable to meet the Government quota of completed doctoral theses because there are not enough resources.

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"Research is important. Without a sufficient number of well-trained doctoral candidates we'll struggle to replace the generation of lecturers expected to retire in the next ten years," Mr Blomqvist said.

Just over 50 per cent of Swedish lecturers have completed a doctoral thesis. The agency is keen for this figure to rise. Sigbrit Francke, the agency's head, told the newspaper Dagens Nyheter: "It is imperative that vacancies are filled by lecturers who have completed their doctorates."