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Cambridge University is to campaign for funding arrangements that will preserve its position among the world's elite ÖйúAƬ institutions, its new vice chancellor said this week.

Alec Broers, who succeeds Sir David Williams as only the second full-time head at Cambridge, warned the Government that "if the funding schemes remain as they are, then, no matter how much we do to implement financial efficiencies in our administration, Cambridge will have to find alternative resources to maintain its excellence".

In the latest round of cuts, Cambridge's grant was reduced by 4.5 per cent to Pounds 86.7 million.

Professor Broers said the Dearing review should "avoid the slipstream of mediocrity", adding that the university would "encourage the introduction of funding schemes that take into account the diversity of the university sector".

Cambridge will lobby for a funding regime that rewards the best, he suggested. "No one who has the guts to ask for the best can escape being accused of elitism. Egalitarianism is naturally desirable when votes are to be gained, but it snuffs out the flame of inspiration and is the executioner of the first division."