Fianna Fáil is to seek increased funding for third-level education in the October budget.The minority Fine Gael-led Government will be relying on the party's support to secure its passage through the Dáil.

“We nailed our colours to the mast on this in our manifesto and have subsequently said there has to be a direct increase in allocation to the third-level sector,” said Fianna Fáil leader Micheál Martin, “otherwise we are storing up big trouble for the country.”

Mr Martin said the Government should reflect on the need for "significantly increased funding" for the sector. He called for the restoration of grants to postgraduate students.

Taoiseach Enda Kenny said the Cassells report on the funding of third-level education would be discussed by the Oireachtas education committee.

“There is always the balance between the output of what can come from universities and the challenge that is there for providing sufficient money for it. We did not have this capacity for quite a number of years.”

Mr Kenny said he did not want to predict the budgetary outcome, but the report would be considered very carefully. It was an issue which concerned the Government, he added.

Key estimates

Mr Martin said referring the report to the committee was kicking the can down the road, given its deliberations would not be concluded ahead of the budget and the key estimates’ formation and allocation.

The report had outlined three options, each requiring increased State funding. “The third-level sector is in financial crisis,” he added.

Mr Martin said the Public Accounts Committee had last year identified some institutes of technology as being in dire financial straits.

Mr Kenny said the Government accepted the report, “insofar as possible and, given the economic constraints on Ministers in general, the priorities will be reflected in the budget in whatever way they can”.