Universities in Canada's most populous province have been dealt a serious blow to their budgets by funding cuts of 15 per cent announced by the Ontario government.

The Council of Ontario Universities, the main body representing post-secondary institutions in the province of more than 11 million residents, says the C$280 million (Pounds 133 million) cuts are too deep and too quick. It says the province's 22 universities have already been coping with two decades of underfunding.

The Progressive Conservative Party's austerity measures, which take effect this coming year, are part of overall cuts totalling C$5.7 billion over three years. These mainly affect health, education, welfare and municipalities. The eight-month-old administration is making unprecedented efforts to wipe out its deficit by the year 2001. Ontario currently spends C$56 billion a year and this year has a C$9.3 billion deficit.

In Canada, education is managed by the provinces but the federal government provides partial funding in the form of transfer payments.

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However, by next spring, education transfer payments will be grouped in one block with health and welfare, leaving the provinces to decide how the money is split up.

A cabinet briefing note leaked to the Toronto Star in October points to the federal government opting out of post-secondary funding. If that happens Ontario will be looking at another billion dollars in lost revenue for post-secondary funding. Ontario's department of finance is preparing a discussion paper for its spring budget that will outline how it wants to restructure universities. The Council of Ontario Universities is at a loss, however, on what role to adopt.

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On the day of the cuts announcement, council president Bonnie Patterson announced: "We are prepared to work in partnership with the government but with funding so limited it will be challenging in this environment to determine what more could be done that would not put the quality of post-secondary education at severe risk." Ontario students will have to meet some of the shortfall. They will see tuition fees rise by at least 10 per cent. In addition, universities will have the discretion to raise it by the same amount.

Several universities have already decided they have no choice but to increase tuition by the maximum amount, according to the council.

John Snobelen, Ontario's education and training minister, rejected criticism that the cuts will deter poorer students from applying for university. He said he had earmarked more money for student loans and that he was unhappy with the programme in its current form.

According to the government universities will also be obliged to set aside 10 per cent of any new fee earnings for needy students. The minister says universities are "changing just like every other organisation in the western world that has to do more with less".

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Mr Snobelen, whose government campaigned on the slogan "the common sense revolution", says he is committed to lowering the province's debt, (the province pays 16 cents on every dollar to finance the debt's interest - the same amount spent on education and training).

He says these measures are necessary so students do not graduate into a society that has few jobs.