Vice-chancellors at London universities have told London mayor Ken Livingstone that exorbitant housing costs and a failing transport system are threatening the future of their institutions.

The difficulties in the capital are putting off students from applying and making it hard for higher and further education institutions to recruit and retain top-quality staff, according to Roderick Floud, convenor of the London Higher Education Consortium.

"The high standards of these institutions are a major attraction," he said. "We must build on this to retain London's talent and to attract students from the rest of the UK and from abroad."

Describing the meeting as positive, Professor Floud said the LHEC would lobby for university staff to be included in the government's affordable housing schemes. "We want to work with the mayor to ensure that these problems are tackled and that London remains at the forefront of education and training," he said.

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The concerns of London's universities were discussed at a meeting between the Greater London Authority and the LHEC last week. The meeting, which was facilitated by London First, a group of 330 businesses, looked at redressing the mismatch between skills and jobs in the capital. Closer ties with universities are seen as key by creative industries because universities train most of their personnel. London's teaching hospitals train 40 per cent of doctors.

Mayor Livingstone said: "I am taking the concerns of the universities and colleges very seriously and I can think of no better places to go for help and expertise in tackling these issues."

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However, he was unable to attend the meeting as he was preparing for discussions over the future of London Underground. His senior economic policy adviser, John Ross, took his place. A meeting with Mayor Livingstone is expected in the new year.

Prioritising learning and knowledge was one of the nine key policies in the mayor's Draft Economic Development Strategy , launched last week by the London Development Agency.

The draft says the GLA will work with London's higher education institutions "to expand their role in developing London as a world city" and also to encourage links between education and the business sector.

It adds: "Education is also appreciated as a significant activity for its own qualities."

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