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Lecturers' accused them of a "fat-cat mentality" when The Times Higher Education Supplement revealed that vice-chancellors' pay went up by 6.3 per cent and pay for lecturers and researchers rose by 3 per cent.

The highest paid vice-chancellor is John Quelch, dean of the London Business School, who earned £266,000 after a rise of 5.6 per cent. Michael Wright, the vice-chancellor of Aston University was the second highest. His pay rise of 10.3 per cent took his salary to £161,000.

Arthur Lucas, principal of King's College London, earns £158,000 after a rise of 15.3 per cent. Lord Oxburgh, who retired last month as rector of Imperial College, London, received a 27.1 per cent increase, taking his salary to £136,000. Dai John, the vice-chancellor of Luton, had a pay rise of 24.1 per cent to £130,000.

David Triesman, general secretary of the Association of University Teachers, said: "These figures reveal a shameless attempt by vice-chancellors to reward themselves for the hard work and effort of their staff. This fat-cat mentality smacks of hypocrisy of the highest order." Tom Wilson, head of the universities department at thelecturers' union, Natfhe, said:"It is never clear what criteria are used for deciding vicechancellors' salaries. Universities' remuneration committees are supposed to review their performance but against what? Student numbers? Progress on equal opportunities? Industrial relations?

"The salaries don't seem to bear any relation to the size of the job. Last year we wrote to universities asking for details of the basis of their decisions but got nowhere."

A spokesman for the London Business School said: "We are operating in an international environment. We have to pay according to the rates that the market demands. It is as simple as that."

Of 163 heads of institutions, only 18 accepted pay rises of 3 per cent or less and a further 10 accepted a pay cut, usually compared with their predecessors' salaries. The rest had rises greater than those they imposed on their staff.