University subjects which are struggling to attract students will have to be taught in larger, national centres, suggest funding chiefs.
Students might have to travel to national centres to study declining subjects
But the head of the Higher Education Funding Council for England, Sir Howard Newby, warned against "moral panic" over course closures.
Almost a third of university departments offering physics have closed in the past decade.
But Sir Howard rejected government intervention to protect courses.
Arguing in favour of "market forces" and university independence, he said that course closures - which have threatened departments teaching physics, chemistry, maths and modern languages - were natural and inevitable.
'19th century subjects'
"We mustn't hold back innovation by indulging in a moral panic over department closures, when the decision to close might be made for very sensible reasons," said Sir Howard.
In science, he said many subjects were still defined by "19th century disciplinary categories" - when much cutting-edge research was about crossing subject boundaries.
As such, he said that while chemistry departments might have closed, the number of chemistry staff had increased - with many now in other expanding departments, such as forensic science.
The funding council was asked last year by the education secretary to consider how "strategically-important" subjects might be protected in the university system.
This was against a background of high-profile course closures in subjects such as physics and chemistry - and fears that this could have damaging consequences for the economy.
'No bureaucratic intervention'
Introducing the funding council's response, Sir Howard said there was "no enthusiasm for central planning" and "no desire for heavy-handed bureaucratic intervention".
However, where there was a clear need to sustain subjects of economic importance - such as some languages and sciences - it might be necessary to concentrate resources in national centres.
They would have a sufficient number of students and research staff to maintain an economically viable department.
At present, funding council figures show that subjects such as French and German are widely and thinly spread - with a number of universities having fewer than a dozen undergraduates taking French courses. In contrast, there are a small number of French departments with several hundred students.
Sir Howard indicated that national centres might also be necessary to promote subjects which were of strategic importance, but which lacked student numbers - including languages such as Chinese and Arabic and regional studies in former Soviet Union states and eastern Europe.
Despite the economic significance of China, the funding council figures show that there are fewer than 400 undergraduates studying Chinese studies in the UK's universities.
However the further and higher education union, Natfhe warned that merging courses into a small number of centres risked making them inaccessible to less mobile students - such as part-time students who had family commitments that would prevent them from travelling.
Sir Howard also warned that a drop in applications for some subjects was often a problem that needed to be addressed in school rather than at university - and any intervention would be more effective at school level.
A decline in students taking A-levels in modern languages and chemistry meant that there was a shrinking pool of potential applicants for degree courses in the subject.
Since 1999-2000, there has been a 22% fall in pupils taking maths A-level and 15% fall in chemistry - and Sir Howard warned that institutions were struggling to cope with such a steep downturn.
'More appealing physics'
The Institute of Physics says that over 30% of physics departments have disappeared since 1994 - with only 50 universities offering the subject to undergraduates.
But one of these closures - physics at Newcastle University - is being reversed, with the announcement that the subject is to be re-introduced in a form that will make it "more appealing and relevant".
Universities are also developing their own recruitment incentives - such as the University of Reading offering students in some science subjects £2,000 scholarships.
Figures from the funding council also showed that course closures were particularly likely to affect courses with lower research ratings. While overall student numbers in chemistry have fallen by a fifth in five years, the top-rated courses have gained rather than lost student numbers.
The Higher Education Minister, Bill Rammell, said: "We have a vibrant high quality system of higher education in this country, but as elsewhere around the world, there are challenges ahead."
He welcomed the finding that university science departments were not in crisis.
"But that does not mean we should be complacent. I will take a long, hard look at their advice, listen to the views of universities, employers and others with an interest, before formally responding later in the year."
The Conservatives' higher education spokesman, Stephen O'Brien, said the "problem goes back to an earlier stage than university level" - and blamed a "lack of rigour in our schools".
"The blunt truth is that, today, there are fewer students studying maths, modern languages and pure sciences," said Mr O'Brien.
The Royal Society of Chemistry gave a guarded welcome to the funding council's conclusions, but warned that "such a strategically important subject as chemistry should not be solely determined by the decisions of individual institutions responding to the market".