The two universities have very similar missions and aspirations, which can be fulfilled better by working together than apart

John Haworth, UNL

The collaboration would widen the range of subjects on offer for students and provide a firm financial base for further growth, the universities said.

A London Guildhall spokesman stressed that the merger was not something they had been forced into but came from a position of strength - both universities had been recruiting to target and were not in debt, he said.

The University of East London may also join the venture, as the parties consider a "joint strategic alliance".

Redundancies

A final decision on the merger will be made in the autumn, but it was too early to say whether any staff at the two institutions would be made redundant, the spokesman said.

Students at the institutions had been informed of the plans and would be kept "fully informed" as talks progressed, university authorities said.

The Guildhall's chairman of governors, Sir John Carter, said the discussions would build on the "excellent work of the two universities", providing a firm foundation for growth to meet the needs of London.

Chairman of governors at UNL, John Haworth, said: "The two universities have very similar missions and aspirations, which can be fulfilled better by working together than apart."

The plans have been approved by the Higher Education Funding Council for England (Hefce).

Its chief executive, Sir Brian Fender, said: "I welcome the decision of two strong universities to discuss how, together, they could become even stronger and serve the needs of their communities.

"Hefce stands ready to assist in realising the proposals when they are fully formulated," Sir Brian said.

The Guildhall has sites in the City of London, Tower Hamlets and Hackney; the UNL has sites in Holloway and Highbury.