More than half of employers believe that the UK is producing too many graduates and that the rise in student numbers has led to a dumbing down of standards.
Fifty three per cent of the 215 personnel managers surveyed by the Association of Graduate Recruiters (AGR) said that they felt the UK has too many university students while six out of ten agreed that university expansion has adversely affected standards.
Eight per cent of young people went to university in 1963 compared with 43.5 per cent today, and according to the Higher Education Statistics Agency, the number of students in higher education has risen by 4.3 per cent in the past year.
Coming only days before the second reading of the governmentís controversial top-up fees legislation, the figures will not be welcomed by Tony Blair and his ministers. The main justification for introducing tuition fees is to pay for the massive expansion in higher education.
But although half of the employers in the AGR poll agreed that students should contribute financially to their studies, they were also split on whether universities were developing graduates with the right skills for the workplace - some 38 per cent agreed and 36 per cent disagreed.
More than six out of ten employers also thought that students would benefit by working while studying
But higher education minister Alan Johnson defended the governmentís policy of university expansion. Speaking at an an AGR conference, he said that eight out of ten new jobs expected to be created in the UK over the next few years would require a higher education qualification.
"There are great social benefits to a university education, but there is also an unanswerable economic case for expansion," he said.