Oxford dons vote against business school project

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Oxford University faced acute embarrassment last night after plans for a pounds 40m business school were postponed amid controversy over a pounds 20m donation from the middle eastern financier, Wafic Said.

Several hundred academics attended a meeting of Congregation in the Sheldonian Theatre to vote on the proposed development of the business school on the present site of the university sports ground, next to Merton College. The proposal provoked outrage because the fields had been sold to the university by Merton in the 1960s on the understanding they would not be developed.

Although Congregation voted 259-214 against the development, the proposal might still go to a postal vote next week.

Many opponents of the plan were said to disapprove of the involvement of Mr Said, a friend of Baroness Thatcher, who helped British Aerospace win the Al-Yamamah arms deal with Saudi Arabia.

Much of yesterday's resolution centred on Mr Said's stipulation that a private foundation be set up to govern the school. This would be run by the vice-chancellor, and three university representatives, alongside Mr Said and five outside trustees appointed by him.

Opponents of the plan see this as a threat to the university's constitutional independence and fear a precedent could be set, leading to a fragmentation of Oxford's governing body.

Mr Alexander Murray, a medieval history don opposing the plan, said the proposal was a "distinctly discomforting arrangement" and warned that it could be counter-productive. "We've got a big, rich institution in our midst," he said. "I'm struck by the degree to which we are beholden in this field to outside benefactors."

Dr Michael Woodin, a Fellow of Balliol College and Green Party councillor, questioned the nature of the "strings" attached to Mr Said's offer.

He said that although Mr Said had protested against claims in the past that his money had come from dubious sources, he had still made his fortune in the arms trade. "He is an arms deal negotiator, the middle man, if you like - the fixer," he said.

But the university's vice-chancellor, Dr Peter North, who proposed the special resolution to set up the school, said he was satisfied that the university's ethics committee had looked into the matter thoroughly and urged the congregation to vote for the proposal. "I believe that not only would we lose Mr Said's support if we didn't vote for this proposal," he added, "but lose the support of other benefactors and put at risk the good will of many others."

The proposal will now be put before a meeting of the Hebdomadal council, which will decide on Monday whether or not to put the matter to a postal vote.