Swansea Metropolitan University and the University of Wales Trinity Saint David plan to keep their separate names under the proposals, but would unify under one organisational structure. They also hope to involve further education colleges from the area to establish a “regional educational group”.

Although the universities have been in talks for several months about the merger, their governing bodies this week approved the idea, which will now be subject to negotiations on the institution’s exact structure and constitution.

David Warner, vice-chancellor of Swansea Met, said the development “builds on the excellent track record both universities have of working together”.

He added: “It will be based on a partnership of equals and will free up greater resources for front-line delivery. It also meets the Welsh Assembly government’s priority for greater critical mass and radical structural change.”

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Leighton Andrews, the education minister for Wales, has warned the sector that future funding might be dependent on institutions’ willingness to merge.

Mr Andrews, who recently announced that Welsh students will be shielded from tuition-fee rises, said earlier this month that Welsh universities had to “adapt or die”.

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Medwin Hughes, vice-chancellor of Trinity Saint David, said: “This is a radical new model for the higher education sector in Wales and it leads the way by responding to the challenges set down for the sector by [Mr Andrews].”

Trinity Saint David was recently formed by the merger of the University of Wales, Lampeter and Trinity University College Carmarthen – Wales’ oldest higher education institutions.

simon.baker@tsleducation.com