THE Government was last night accused of failing to understand the important research bond between business and universities.

The Confederation of British Industry (CBI) said product development would be seriously undermined by proposed changes to collaboration between the two.

A series of five government reviews includes plans for universities to own the rights to all joint research and that business should pay more of the overheads during research.

The CBI described the ideas as wholly unacceptable.

It said the moves were counterproductive to UK industry at a time when the intense pressures of international competition meant the Government should be giving it every encouragement.

Digby Jones, CBI director-general, said : "These proposals will jeopardise the level and quality of UK research, stifling new product development at a time when the future of UK manufacturing depends on it.

"This web of disconnected reviews fails to recognise that these are genuine research partnerships. This is not about business taking advantage of cheap labour in the universities or seeking to unfairly exploit their discoveries.

"Both sides bring expertise and resources to the party and the sharing of costs and benefits should be agreed between them.

"Research for its own sake will not help achieve the Chancellor's drive for improved productivity through innovation."

The CBI said that giving universities the rights to joint work would be counter productive because it would severely reduce the amount of research carried out.

The organisation said: "Companies need a sensible share of the intellectual property to make their involvement worthwhile.

"Universities are right to seek to maximise income from their work but they are not usually in the best position to exploit it, protect it in world markets or develop it into commercial products.

"Intellectual property arrangements should reflect the relative contributions from each partner and the risks each takes."

It called for a contractual basis to future research which would reflect the involvement of both sides.

"The new assessment system for public funding of research, now being formulated, should include measures of business impact. The current assessments are over-biased towards academic excellence.

"University research groups should be rewarded according to the business and economic effect of their work."