The European Commission has unveiled plans for a world-class institute of technology intended to boost the EU's economic competitiveness.
MIT is the model for the European Institute of Technology (Picture: MIT/Donna Coveney)
It would consist of a small central core organising EU-wide research teams.
The move is a response to surveys which show that only a handful of European universities can compete with the world leaders, which are mostly in the US.
The Commission has also noted that China and India are the "coming players in the knowledge game".
Critics of the European Institute of Technology (EIT), as it has been labelled, fear it will divert money away from another new programme to sponsor top-level research.
"Excellence needs flagships - that's why Europe must have a strong European Institute of Technology, bringing together the best brains and companies, and disseminating the results throughout Europe," Commission President Jose Manuel Barroso said on Wednesday.
He said it would teach graduates and doctoral candidates, carry out research and be active in innovation.
"We have a really urgent problem with our deficit, especially compared with the United States, in science, research and innovation," Mr Barroso added later.
European Commissioner for Education Jan Figel said Europe had to improve the relationship between education, research and innovation.
"Europe consistently falls short in turning R&D results into commercial opportunities, innovations and jobs," he said.
The name EIT is a deliberate reference to the US's Massachusetts Insitute of Technology (MIT) which has a strong record as a link between academics and industry.
Former European Commissioner Chris Patten, now chancellor of Oxford University, has said the Commission should concentrate its funds on existing institutions.
He argues that the EIT, which an earlier Commission paper suggested could cost 2bn euros (£1.4bn), would undermine the nascent European Research Council (ERC) which was created for the same purpose.
Cambridge University's pro-vice-chancellor for research, Professor Ian Leslie, has also called for more funds to be channelled to the ERC, rather than the EIT.
However, the Commission has opted for the idea of a "virtual" institute, rather than a new organisation in direct competition with Europe's top existing universities.
It says the EIT will not be a university on a single site, but a "multi-site legal entity which brings together the best teams and university departments in strategic fields across Europe".
Microsoft, Nokia and Pirelli are among the companies reported to have expressed interest in the institute.
The Commission's proposal will be discussed at the next EU summit in March.