As a young man, Michael Arthur competed as a county-level swimmer, specialising in the notoriously exhausting butterfly stroke.

He is, he suggests, the only university vice-chancellor to be a member of the "one-mile butterfly club", although he admits that he could swim only a fraction of that distance today.

This capacity for endurance bodes well for his term as the next chairman of the Russell Group of 20 large research-intensive universities, for he readily accepts that he is taking over at a time of almost unprecedented turmoil in the sector.

Despite professing to be an optimist about British higher education, the University of Leeds vice-chancellor is able to reel off a long list of the threats the sector is facing.

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"For the first time ever, as far as I can remember, every single funding stream is under potential threat."

He pointed to uncertainties over quality-related research funding and also over income from student fees, research councils, industry research and charity research.

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"Where else do I get money from? It's all threatened and it's all uncertain," he said.

The Russell Group has been involved in something of a spat with representatives of other mission groups recently about the upcoming research-funding allocations.

It fears that a greater spread of funding across the sector will hit the traditional research elite.

Professor Arthur insists that he is "not a vice-chancellor who thinks that only the Russell Group matters". But he argues that the evidence is "pretty clear" that the best blue-skies research, which he says has a greater impact on the economy than applied research, is being done at Russell Group institutions.

"I'm not saying that people aren't doing worthwhile research at other universities, but I think we have to recognise the importance and the cost of running large research groups," he said.

Other countries, including China, Australia and Germany, are so impressed by the effectiveness of the UK system that many are trying to copy it, he noted.

"They have looked at the research assessment exercise of old, the concentration of funding and the impact it has (had) on our research ... and are trying to emulate it by pouring money into their top 20 or so universities," he said.

"As a university sector we enjoy second place in the world after the US, and I think it's a really good idea to ask ourselves the question, do we want to stay there?

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"Let's not inadvertently slip back to 10th or even 20th (place) by not thinking this through. I would hate to see it happen as an accident of the RAE process."

Professor Arthur, who grew up in Essex, said he was proud to be one of just two current Russell Group vice-chancellors to have attended a comprehensive school - the other being the University of Warwick's Nigel Thrift.

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His background has made him particularly interested in widening participation, and he attributes his own success at school to a very inspiring head teacher.

He went on to study medicine at the University of Southampton, and practiced it alongside his research activity, which focused on the liver, until 2003.

His career as a doctor, he said, helped him to hone skills he uses every day as a vice-chancellor, including the art of "telling people bad news".

In addition to his prowess in the pool, he is a keen sailor. He has a one-third share in a 40ft yacht with two friends, with whom he has had some racing success.

The other key issue he faces when he takes over as chairman of the Russell Group in September is the future of tuition fees - which, it is widely assumed, elite institutions wish to see increased.

He said he was not surprised that the main two political parties had refused to broach the topic before the next general election, but he warned that financial uncertainty was never good.

"So long as they get on with it after the election, and so long as it's not kicked into the long grass again, I'll be reasonably happy," he said.

He is clear, however, that by hook or by crook, funding for teaching has to increase.

"I honestly don't know what an appropriate figure (for the fees cap) is," he said.

"I know that the gap with the unit of resource from around 1990, which is a good benchmark, is about 30 per cent ... and I would remind you that, for a long time, the proposal was for a fee cap of ?5,000 rather than ?3,000. That actually would have filled that gap, so it's a starting point to consider.

"But is it absolutely clear that the gap should be filled via a fee rather than direct public funding through the Higher Education Funding Council for England?

"I think that question should be asked, and I think the Government has found that doing it through fees isn't necessarily the easy or cheap option. So all the alternatives have to be considered. But do we need more money? Yes we do."

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john.gill@tsleducation.com