The UK government has "suspended" ?50 million of spending on higher education, freezing two projects unveiled by the vanquished Labour administration three months ago.

The Conservative-Liberal Democrat coalition announced on 17 June that it would suspend the ?25 million Newton scholarship programme, aimed at attracting the world's best overseas research students to the UK, along with the ?25 million University Enterprise Capital Fund for the commercialisation of university inventions.

When they are included in the reductions to the higher education and science and research budgets announced since last year, the cuts now total about ?1.3 billion.

Last week, the government froze or cancelled ?10.5 billion worth of projects across a range of departments that had been announced in the Labour administration's dying days. Some in the government have accused Labour of leaving "stink bombs" of profligate spending in the expectation that the election would be lost and a new government would be forced to cut the schemes.

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The fate of the scholarships and the enterprise fund will be decided in the Comprehensive Spending Review this autumn. The scholarships were to provide ?25,000 each to 100 international researchers.

When Lord Mandelson, the former business secretary, announced the Newton scheme in April, he said it would help Britain's high-tech and research-intensive industries, which he argued "need a highly skilled workforce to ensure that they can grow and compete globally".

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Malcolm McCrae, chair of the UK Council for Graduate Education, said the loss of the scheme would be damaging. "A great proportion of those students (will be) the future movers and shakers in research terms. Some would have stayed in the UK and made their careers here," he said.

Other countries are fighting hard to attract overseas researchers. New Zealand, for example, reduced fees for international PhD students to the level of those for home students in 2006. It offers up to 40 scholarships for such students each year, which cover fees and provide living allowances.

Dominic Scott, chief executive of the UK Council for International Student Affairs, said the UK was "already desperately short of funding for bright postgraduate scholars".

"It is a hugely competitive market. We are not able to compete in it. The Newton scholarships were trying to plug that gap," he added.

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The University Enterprise Capital Fund was announced in the Budget on 24 March. The fund would have been worth up to ?37.5 million, with the private sector providing a portion of the support.

john.morgan@tsleducation.com