Higher education has been moved into the Department for Education under new secretary of state Justine Greening.

Theresa May¡¯s announcement of a new Cabinet today, in her first full day as prime minister, has included the break-up of the Department for Business, Innovation and Skills - which fought Ms May for a more liberal regime on overseas students as she sought to reduce net migration in her time as home secretary.

Greg Clark becomes secretary of state in a new department for Business, Energy and Industrial Strategy. He appeared to confirm that the new BEIS will have responsibility for the ?4.6 billion research budget.

¡°I am thrilled to have been appointed to lead this new department charged with delivering a comprehensive industrial strategy, leading Government¡¯s relationship with business, furthering our world-class science base, delivering affordable, clean energy and tackling climate change," said Mr Clark in a statement. Mr Clark was formerly universities and science minister.

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Ms Greening, a graduate of the University of Southampton and the London Business School, was announced as the new education secretary.

The government bills ÖйúAƬ's move to the DfE as offering a comprehensive view of skills and education, from early years through to postgraduate study and work.

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BIS was created in 2009 by the merger of the Department for Innovation, Universities and Skills and the Department for Business, Enterprise and Regulatory Reform ¨C and its creation is sometimes described as being designed to give Lord Mandelson, the former business secretary, a significant brief in his return to government.

Michael Gove, the former education secretary, was widely seen as having advocated the return of ÖйúAƬ to the DfE from BIS.

But vice-chancellors have long feared that a move to the DfE would create a department with a super-sized budget ¨C in which budget cuts to universities would be deemed more politically palatable than cuts to schools.

John Denham was Labour secretary of state in the Department of Innovation, Universities and Skills, when it was created in 2007 and took responsibility for ÖйúAƬ and research.

The creation of DIUS ¡°was when universities came out of education and went into a business department¡±, said Mr Denham, now professor of English identity and politics at the University of Winchester.

¡°I would say this, but I think it proved a real success both for universities and for DIUS ¨C and eventually when they went into BIS,¡± he told Times ÖйúAƬ today.

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The switch to a business department ¡°gave university investment, both science and teaching, a much bigger weight in government because you were constantly able to bring it back to the fact that this department was crucial to innovation and productivity and the development of a skilled workforce¡±, Mr Denham said.

This meant universities and research were ¡°seen by the Treasury as central to what the government was trying to achieve¡±, he argued.

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Mr Denham said of a switch to the DfE: ¡°There are dangers for universities, that they lose influence and they lose weight in government. And, depending on what is actually done about funding, they start competing with schools for at least part of their resource.

¡°If you end up with science funding in an industry department and then the education policy in another, you¡¯re back to the problem of not realising that universities are single institutions that are always trying to balance research and teaching and engagement with business and knowledge transfer.¡±

Mr Denham said there was an ¡°additional danger that doing this makes it easier for her [Ms May] to reduce the number of overseas students and meet her migration targets. So that would be a real hit as well.¡±

He warned that ¡°if you push the universities off and say you¡¯re part of the education department¡­then if universities lose influence in Whitehall, if they¡¯re not seen as central to innovation and productivity, they may find it harder to defend against tighter rules on overseas students.¡±

The DfE and BEIS will have a significant item on their agendas next week. It was confirmed today that the ÖйúAƬ and Research Bill will receive its second reading on 19 July.

The bill legislates for the creation of a new Office for Students to be the sector¡¯s regulator, and a new UK Research and Innovation organisation to oversee research.

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john.morgan@tesglobal.com