Peter Mandelson said there would be record numbers of students next year
Universities Secretary Peter Mandelson has hit back over claims planned cuts to the higher education system would "bring it to its knees".
The Russell Group of top UK universities said cuts of £900m would lead to university and course closures.
Writing in the Guardian, Lord Mandelson said although universities would not avoid the coming funding squeeze, their income was at record levels.
The university lecturers union UCU said Lord Mandelson was "in denial".
In December the government in England revealed it would be making extra cuts of £135m to universities, on top of the £600 million announced in the pre-budget report and £180 in efficiency savings.
But Lord Mandelson insisted income for research and tuition would still grow between 2009 and 2011.
He said the government's credentials in investing in higher education should not be in doubt.
"We are absolutely committed to increasing the opportunities for young people to study at university and we are clear that excellent research and teaching are vital to this country's competitiveness and character.
"Universities have never enjoyed such a long and sustained period of public and financial support and more students will be studying next year than ever before in our history.
"These new constraints are very small in the context of overall university income, and certainly do not reverse a decade of investment in excellence."
But the University and College Union said the higher education sector was taking the biggest hit in public spending cuts.
This came as Germany France and the US pumped additional funding into their universities as part of their economic recovery plan.
UCU General Secretary Sally Hunt said she was astonished that Peter Mandelson was "seeking to downplay" the impact of the cuts.
She said: "Britain invests less public money in higher education than other competitor nations on average and the government is in complete denial if it cannot see the devastating effect these cuts will have on staff and students.
"We face the frightening prospect of universities being forced to close, thousands of staff losing their jobs and much larger class sizes.
"Unless the government heeds these warnings it will be impossible for the UK to remain a major player in the global knowledge economy."