Universities in Northern Ireland are in a perilous position, the Employment and Learning Minister has warned.
Stephen Farry told the Assembly he was "deeply worried" about the detrimental impact budget cuts and the cap on tuition fees could have on Queen's and Ulster universities.
The Alliance Party MLA said: " Our universities are in a very perilous state at present.
"They have had their ability to generate income restricted by the decision of the Executive to freeze tuition fees.
"We have also now a situation where that structural problem has been compounded by further budget cuts."
The Minister was responding to a question from DUP MLA Edwin Poots in which he claimed the competitiveness of third level institutions could be compromised because of financial pressures.
The Department of Employment and Learning has had £16.1 million (8.4%) cut from its annual budget over the next year.
Mr Farry said he was "deeply worried" about any reduction in university places and warned it could lead to a brain drain or price other young people out of higher education.
It could also send out a "worrying message" to potential investors, he claimed.
"As much as we would say 'look we are on the brink of having a lower level of corporation tax', if at the same time they are seeing question marks being raised over our ability to invest in skills then they are going to be asking even more searching questions and could potentially be looking elsewhere in terms of their investment decisions if they don't have the confidence and certainty that we can produce for them.
"We have done extremely well over the past number of years but that situation is not sustainable if we are going to continue down the same road that we are on at present in terms of cutting our skills budgets."
Later, Mr Farry rejected calls from Sinn Fein to impose a target for the use of E-books in universities.
Cathal Boylan claimed the move would be more efficient but the Minister insisted his department should not micro-manage.