Three thousand jobs will go in English universities following last year's Budget settlement, according to research by the Committee of Vice Chancellors and Principals.

This news came as the ÖйúAƬ Funding Council for England announced that the sector is expected to dip into the red for the first time. Universities and colleges' financial forecasts show an overall deficit this academic year of more than Pounds 17 million - 0.2 per cent of total income.

CVCP researchers found institutions reluctant to respond to their survey, treating much of the information sought as commercially sensitive and confidential. But they are confident that conclusions can be drawn from the one-third who did respond. The data will go to the CVCP and Department for Education and Employment's joint working party on the cuts.

The heaviest cuts are concentrated in big civic universities and the Inner London former polytechnics. Sheffield and Nottingham have announced plans to cut around 180 jobs each and Liverpool expects to lose around 190. London Guildhall and South Bank universities are set to cut 84 posts each, South Bank is the first to make compulsory redundancies.

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The researchers believe that the civics have been particularly hard hit by swingeing cuts in capital funding and are retrenching in the expectation that the next two to three years will be extremely tough. While universities have traditionally been reluctant to sack staff, years of efficiency gains have squeezed the system to the point where job cuts become almost the only means of serious cost-cutting.

The questionnaire did not ask institutions to quantify the number of posts frozen. But findings on projected student:staff ratios suggest that many posts are not being filled. Some institutions predict average SSRs of 20:1 or 25:1.

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The HEFCE figures show that institutions expect their expenditure this year to exceed their income by over Pounds 16 million. After tax and depreciation, the shortfall amounts to Pounds 17,113,000. The projected cash crisis is calculated from the 1996 mid-year returns.

A briefing note from the funding council warns: "Nearly two-thirds of institutions are now predicting a worse outturn for 1996/97 than previously, and the forecasts suggest that - unless offsetting action is taken - the sector as a whole will be in deficit after depreciation of assets at valuation and tax."

Funding council officials say that the full 1996 financial forecasts, due at the end of this month, are expected to indicate that even after emergency action by institutions - including widespread staff cuts and postponed maintenance work - the sector will be able to do no better than break even.

Ian Lewis, the funding council's head of finance, warned there could be a significant number of institutions facing serious difficulties.

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Draft proposals for a new funding system for teaching, to be published later this month, are also included in the briefing. The paper confirms that the funding council is planning to allocate extra student numbers on the basis of quality, demand, national policies and regional needs.

A spokesman said the funding council was considering drawing extra numbers from a variety of sources, including growth allowed by the Government, numbers top-sliced from those allocated to institutions, or additional numbers released through the council's plans to even out funding of similar provision across the sector.