UHI may need to cap student numbers to making savings
The prospective University of the Highlands and Islands (UHI) has said it may have to cap student numbers at the current level.
Principal James Fraser's warning follows 6.4% cuts in university funding announced in the Scottish government's draft budget on Wednesday.
Mr Fraser said finding efficiencies would be hard.
UHI - which has sites in the Highlands, Argyll, Northern and Western isles - has applied for full university status.
The bid is being assessed by the Quality Assurance Agency for Higher Education (QAA).
Mr Fraser told BBC Radio Scotland: "We may have to simply cap our student numbers at the current level.
"Of course, that is not what we want to do and obviously it will be very disappointing for would-be students."