The SNP universities minister has refused to say whether or not the government would step in if Dundee University was at imminent risk of closure.
It comes after we revealed a senior member of staff at the university said it could close within two years without significant cuts.
Insiders have also said the threat facing the institution is “existential”, and without huge reductions in spending its future is uncertain.
Staff are balloting for strike action after the remaining management team refused to rule out compulsory redundancies.
In an interview with The Courier, universities minister Graeme Dey stopped short of committing to a rescue if the recovery plan failed.
He said the government is engaged in ensuring the university has a “sustainable future”.
But he refused five times to say the government would step in if it faced closure.
He said: “Our understanding is from the university is they believe they will find the way through this.”
Recovery will not be without ‘pain’
He conceded the recovery will not be without pain, adding: “In my conversation with the chair of court, she expressed optimism about finding a way through this, and that is certainly the reflected in the other conversations I’m aware of that have taken place with the SFC.”
Universities are independent bodies, with public funding for Scots students representing only a small part of their budgets.
The Holyrood government has stepped in to rescue private companies in the past. Ministers previously pumped £52.4m into renewables manufacturer Burntisland Fabrication.
Mr Dey said it was a matter of “considerable concern” to government about how Dundee University had ended up in this situation.
He said: “The SFC are very closely engaged with university as they work through the process that they are going through.
“Everyone wants answers as to how they got into this situation, and of course what they’re going to do to get out of it.”
He said senior management would require time to develop a plan to return the university to a position of sustainability.
Answers ‘fairly soon’ in the new year
“My understanding is that fairly soon in the new year, they will be able to provide clearer answers to the SFC and to the staff and students, and also indicate what the way forward looks like,” he added.
“We’ve offered them all the assistance that they might want from the SFC in terms of financial experience and whatever they might feel they require.”
The minister also responded to criticism that the Scottish Government’s policy on tuition fees had left universities north of the border over-reliant on international students – with a downturn blamed for the deficits.
Mr Dey said he recognised all UK universities were reliant on international students but did not accept Scottish institutions were over exposed.
He pointed to the hostile environment for international students created by the previous government as a serious issue.
In May, former Dundee principal Iain Gillespie urged the UK Government to re-think restrictions on student immigration.
As part of a commitment to drive down immigration numbers, Westminster has committed to driving down immigration numbers, new rules barring international students from bringing dependents to the UK were introduced.
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