Applications to study at Bradford University have soared by a fifth as the institution faces a massive budget squeeze.

At least 200 places are expected to be lost at the University when national budget cuts bite across the higher education system in 2010/11.

The cutbacks come at a time when 12,042 people have applied to begin studying at Bradford from September – an increase of 21 per cent on last year.

University budgets will be cut by £449 million ahead of the next academic year, the Higher Education Funding Council for England (Hefce) has announced.

Professor Geoff Layer, deputy vice-chancellor at Bradford University, said: “We are delighted with the 21 per cent increase in applications but disappointed that the University will have to reduce the number of students we can accept as the Government is restricting the number of places that are available.

“In 2009 the university was asked to take additional places in science, technology and engineering areas but these extra places have been removed from all universities in 2010. As a result, we believe we will have at least 200 fewer places but we will not know until we are formally notified in March.”

Prof Layer said he was in the dark about which category of students the university would be asked to reduce its offer of places to.

Bradford has the sixth highest proportion of international students of all UK universities – 20 year cent of its student body.

More than 40 per cent of its students live with their parents. By inference, a large number of these students are likely to live in Bradford. About 3,500 home students join each year.

Prof Layer said: “Because we will lose at least 200 places, by the law of averages, 80 fewer students from Bradford will go into higher education next year because these cuts affect every university in the country.

“In Bradford we have a situation where everyone is working really hard to raise young people’s attainment and aspirations and suddenly there is nowhere for them to go, and that’s a crying shame. It means that’s 80 more students looking for a way into a job market that’s already crushed.”

He said the university was looking for creative ways of accommodating those students.

Overall, applications to UK universities have risen by 22.9 per cent, according to figures published by admissions service UCAS. It is the fourth year running that full-time undergraduate applications have risen.

Some 570,556 people applied by January 22, the first cut-off point, and one in five UK and EU full time prospective undergraduates could be denied a place, claim analysts.

Meanwhile, the £3,225 cap on university annual top-up fees must be raised to £5,000 if Britain is to retain its position as a global leader in higher education, a think tank report said today.

And the Policy Exchange paper said students from wealthy households should no longer receive interest-free loans to cover the fees, but be offered low-interest private loans instead. Students who pay their fees up-front should be offered a ten per cent discount.

The report, More Fees Please, warned the cap cannot be raised without reform of the system, because of the damage it would inflict on Treasury finances.

The Government’s student loan debt is £25 billion and could rise to £55 billion by 2018, the reports says.