THE region's leading university should have its funding cut as a punishment for taking "blood money" from Iran, the government was told yesterday.

Robert Halfon, a Conservative MP, also demanded an urgent investigation into Durham University's link with a "despotic regime that tyrannises their own people".

In a parliamentary motion, the MP - who has hounded several British universities which received funding from the Gaddafi regime in Libya - turned his attention to other Middle East dictatorships.

Mr Halfon said Durham University had signed a memorandum of understanding with the Iranian government's Ministry of Science, Research and Technology.

The agreement included "promises to publish joint books, hold joint conferences, undertake joint research and exchange students and members of staff," The motion added: "In return, the Iranian government paid Durham £10,000."

The motion notes that "given the Iranian regime's calls for the death of Salman Rushdie and the public hanging of homosexuals, it is not a suitable candidate to provide universities with academic direction."

Mr Halfon then followed up his accusation in the Commons chamber, telling MPs: "It has emerged that Durham University has done deals with the Iranian regime."

Speaking at business questions, he added: "If a university takes blood money, it should lose an equivalent amount in public subsidy."

However, in reply, Sir George Young, the Commons Leader, said: "Universities are autonomous organisations and accountable for what they do."

The claim follows last month's revelation that an academic at Durham University sought more than £250,000 in US government funding to develop contacts in Iran.

According to a diplomatic cable from April 2008, released through the Wikileaks website, the academic submitted several proposals to the US State Department seeking a total of $439,750 - about £273,000.

The secret message stated that six applications for funding were submitted to the US Embassy's "Iran Watcher" from "Iranian contacts in the UK", including a named Durham figure.

The funding was to be used to set up workshops and strengthen links with organisations and individuals inside Iran, including women's groups, journalists, academics and clerics.

Mr Halfon has previously criticised the London School of Economics (LSE) after it was given £1.5m from a charity run by Colonel Gaddafi's son Saif, who received his PhD from the university in 2009.

The controversy forced the resignation of LSE council director Sir Howard Davies, who admitted that accepting the cash had been a "mistake" that had damaged the university's resignation.