Two of the UK's biggest and best universities, Manchester and Umist, are planning to merge.

Their proposal is to dissolve the existing institutions and create a new university.

This was the recommendation of a joint working group and will now be discussed by the staff, students and governing bodies of the two universities.

In a joint statement the two vice-chancellors, Professor John Garside of Umist and Sir Martin Harris of the University of Manchester, called the proposal "bold and imaginative".

The working party - the Dalton Group - decided unanimously that the dissolution and recreation plan was the best way to provide world-class teaching and research, with the best working environment for staff and students.

It felt the new university would be more competitive internationally and would offer more opportunities for students at all levels, with new subject combinations.

Cautious welcome

There would be scope for greater involvement with business and industry, elimination of wasteful competition with each other, and more economic and social benefits for staff, students, the city and the region.

The staff of the new institution would have enhanced opportunities for self-fulfilment and career development, the group said.

The Association of University Teachers said it was "supportive but vigilant".

Cuts warning

Assistant general secretary Sally Hunt said the union would strongly resist any compulsory job losses or watering down of working conditions.

"The universities should not use the merger proposals to mask funding cuts," she said.

"There now needs to be genuine and honest consultation with staff to review the next steps for merger.

"Our hope is that staff of the university can benefit from a win-win situation, with greater ability to attract research funding, and protection for current jobs."