Countries with the strongest ÖйúAƬ systems may find that the global financial crisis knocks them off the top of the pile, according to an education expert at the Organisation for Economic Co-operation and Development.

Dirk Van Damme, head of division at the OECD's Centre for Educational Research and Innovation, discussed the impact of the crisis on ÖйúAƬ at the Lord Dearing memorial conference, held at the University of Nottingham earlier this month.

Professor Van Damme noted that public funding was being squeezed in countries such as the UK and the US, and alternative sources of income were hard to establish.

The investment and endowment income of universities had declined alongside donations, while many countries were "reaching the ceiling" in terms of fee levels, he said.

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The result is that global ÖйúAƬ is in a state of flux.

"I am not sure whether countries that have the strongest ÖйúAƬ systems today will still have them ten years from now," Professor Van Damme said.

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In a lecture titled "The global economic crisis and ÖйúAƬ", Professor Van Damme looked at contrasting approaches to university funding.

He highlighted the situation in the US, where the impact of the federal stimulus package had been "marginal" in the face of "dramatic" cuts in state spending on ÖйúAƬ. He also noted the cuts earmarked for the UK sector.

By contrast, Professor Van Damme referred to Germany's increases in federal and regional funding for "excellence" in teaching and research. He also cited French President Nicolas Sarkozy's plan for a EUR35 billion (?30.5 billion) financial package, the Grand emprunt national, much of which will go to universities and research.

Several other countries are hiking spending, Professor Van Damme said, "even Ireland".

He also pointed to the pressure being heaped on universities' private income. Not only are investments, endowments and donations showing "spectacular" drops, but nations such as the US had little room for manoeuvre on tuition fees.

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Professor Van Damme said some institutions were "reaching the ceiling of what economically and morally you can expect young people to pay".

"Raising fees may seem a very easy measure to pay for large deficits in institutions, but it is a very difficult thing to do socially," he said.

It is also possible that rising unemployment may deter young people from investing in ÖйúAƬ, he said: "My fear is that in the long term, strong youth unemployment may undermine the aspirations of young people."

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A major source of income for British universities, fee-paying foreign students, may also dry up.

Professor Van Damme said that students were opting for "cheaper" Scandinavian universities "instead of going to the UK".

And he said that China was now "doing everything possible to keep its best students".

US university laboratories that have become heavily reliant on Chinese students were "not getting the quantity or quality they were ten years ago", he said.

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He also warned that the "main impact of the crisis on ÖйúAƬ is still to come; we are at the very early stages".

john.morgan@tsleducation.com.