But the new business- oriented approach is likely to prove controversial among academics who fear the university curriculum could be influenced by the new emphasis on creating profit. Some feel uncom-mercial courses such as classics and medieval history could suffer with the new emphasis on "profitable ideas".
The Government will launch a pounds 20m business fund this week, to be used by universities for "innovation centres", staffed by business managers with commercial backgrounds, where students and academics can consult to turn their ideas into profit. This will provide a third stream of funding for universities, alongside research and teaching grants.
"The whole intention is to create the budding Microsofts and Glaxos of the future," said a government spokesman. "We need to get business and universities to forge closer links to their mutual advantage.This is designed to help businesses and universities to learn to work together."
The creation of the Reach Out Fund, which will be launched on Tuesday by John Battle, the Industry Minister, and Tessa Blackstone, the Education Minister, follows a consultation exercise by the Higher Education Funding Council for England which showed strong support for Government help to develop the "knowledge-based economy".
Government research also shows a few universities, usually with strong science faculties, are benefiting from millions of pounds of business cash.
The fund, designed to widen the appeal of business in the academic world, is inspired by the University of Leeds' textile department which has developed innovative new wool/ micro-fibre blends and whose computer department has developed a learning software package now being used by Unilever.
The new government cash will pay for university staff, such as biochemists, to act as consultants to companies, and for graduate students to do work experience in multinational companies.
It will also pay for businessmen, such as management consultants, to teach courses at universities in subjects they specialise in and to prepare special courses for students on developing business skills.
Ministers at the Department of Trade and Industry believe the fund "will help universities develop as an engine for growth in the knowledge-driven economy". The cash, which will amount to pounds 50m over the next three years, will be available only to universities in England and Northern Ireland.
Companies themselves will not profit from the fund, although the money will be able to be used to pay for "business sabbaticals" at academic institutions.