A vision for a radical overhaul of the British education system has been set out by an academic who believes universities and schools "no longer know what they are doing".

Giving the fourth annual Sir John Cass's Foundation Lecture in London last week, Anthony Seldon, master of the fee-paying Wellington College in Berkshire, set out his blueprint for a "dramatic reconfiguration" of a sector that he said is "overwhelmingly the product of 19th- and 20th-century thinking".

His first target was the level of funding for universities, which he said was slipping against that of international competitors, particularly the well-funded US system.

"This is madness," he said. "Almost alone in the Organisation for Economic Cooperation and Development (OECD), Britain offers a fudge in its higher education, a root cause of our poor international performance."

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His comments came as protesters marched in opposition to the 40 per cent cut to the higher education budget, which is to be filled by increased tuition fee income.

However, while the changes being implemented by government may not be popular, Professor Seldon said that retaining the status quo was not an option.

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Universities are not happy with schools, he said, recommending that the government divide pupils into three streams at the age of 14: academic, technical and vocational.

Of these, "universities would be heavily responsible for overseeing the curriculum in the academic stream, the professions in the technical stream, and the employers in the vocational stream". Assessment at 18 should differ for each group, he said.

Turning to universities, Professor Seldon said there was "as deep a malaise as there is in schools", a problem compounded by the fact that just 1.29 per cent of Britain's gross domestic product is spent on the sector, compared with the OECD average of 1.5 per cent.

His remedy was for public funding to be raised to 3.1 per cent of GDP by 2025, and for universities to be split into the same groups - academic, technical and vocational.

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Academic universities would emulate the likes of Princeton University, teaching "pure" academic subjects such as the natural sciences, humanities and social sciences. Technical universities would train students for the professions, such as medicine, engineering and law. They would also have graduate schools, where graduates from "academic" universities could pursue more applied training.

Finally, vocational universities would offer one-, two- or three-year courses in less academic disciplines.

Professor Seldon also argued that universities should follow the example of the University of Buckingham, and be made "fully independent, able to set their own fee levels and decide how many students to take".

Summing up, he said that the opportunity for radical reform in education comes just once every 50 years: "Our young crave it. Our teachers deserve it. Our country needs it. This is the moment."

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john.gill@tsleducation.com.