Universities generate hundreds of thousands of jobs and contribute billions to the economy, say university chiefs.

As universities push for a substantial increase in funding in the forthcoming public spending review, vice-chancellors have been putting the economic case for higher education.

According to research from Strathclyde, produced on behalf of the Universities UK, higher education provided 562,000 jobs.

Student funding will also depend on the review of public spending next month

For every 100 posts within universities, the higher education sector also generated another 89 jobs outside universities.

The research, which examined the year 1999 to 2000, concluded that universities in the United Kingdom contributed �35bn to the economy.

Universities also brought in �1.3bn in exports, alongside �3.7bn from private industry in the UK.

Universities are pressing hard to gain extra funding in next month's comprehensive spending review.

Competing for cash

They say that the government has set ambitious targets for expansion in higher education, but there has not been a corresponding funding increase.

The government wants half of all young people to go to university by the end of the decade.

Chancellor Gordon Brown has already indicated that education can expect to see an increase in funding.

But there are many competing demands for any enlarged education budget.

School teachers are threatening industrial action over reducing workload - and a deal to reduce the working week will depend on the extra funding.

Head teachers have also published figures claiming that schools will have to cut staff because of budget shortages - and they too are looking for increased funding.

Within higher education, a review of student funding and plans to reduce student debt will also take a slice of any increased share of public funding.

Universities have promoted their own campaign for more cash - the vice-chancellors calling for an extra �10bn.

This includes an extra �5bn which university chiefs say is needed to modernise buildings and equipment.

"This report highlights that higher education is the key to the economic health of the nation and has a huge and positive impact on the UK's local, regional and national economies," said Universities UK's chief executive, Baroness Warwick.