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University leaders are warning that research budget cuts could risk a "domino effect" in the UK after the Pfizer research closure announcement.

Universities have been given details of £940m cuts, including a 66% cut in the science capital budget.

The budget cuts risked the UK becoming a "second-tier economy", said Paul Marshall, head of the 1994 Group of research universities.

Universities Minister David Willetts said this was a "year of transition".

Mr Marshall says that in the context of the closure of the Pfizer research centre in Kent the university budget cuts "send out exactly the wrong message".

"It is our view that the government needs to respond extremely quickly with a positive strategy for growth - or there is a serious chance that a domino effect starts which is extremely difficult to stop," said Mr Marshall.

He said that universities wanted a more positive vision from government in which they could be part of a drive for economic growth.

The Russell Group of leading universities also echoed fears about the future of research.

"In the same week as UK R&D has been hit by the closure of the Pfizer facility in Kent, these new cuts will make it even harder for our top universities and researchers to lead the economic recovery," said Russell Group director general, Wendy Piatt.

The Million+ group of new universities described the final details of the budget cuts as "sobering reading".

The UCU lecturers' union described the budget cuts as a "slap in the face" - and warned that other countries were investing in research and higher education.

A spokesperson for the Department of Business, Skills and Innovation said: "Despite the considerable pressure on public spending we have delivered stable funding. A ring-fence around science and research programmes - including for the first time HEFCE research funding - will provide stability and certainty.

"We have taken the decision to delay some capital investment to maximise investment in research projects and people actually doing research."

The figures published by the Higher Education Funding Council for England spell out the detail of spending cuts to the overall university budget.

Individual universities will be given their allocations next month.

The final budget shows that in 2011-12 universities will face a 9.5% cut compared with 2010-11 - including a 6% cut to teaching budgets and 4% to research.

This will mean a total budget of about £6.5bn for the academic year 2011-12.

The science budget's innovation fund is being protected at £113m.

But there are deep cuts in capital spending for buildings and equipment - losing 55% overall - and 66% of the science capital budget, worth £105m.

In the following year, 2012-2013 universities in England will be able to charge higher fees, up to a limit of £9,000 per year.

The funding announcement also says that there will be a further cut of £830m in that year from the teaching budget, as the first wave of higher fees are received.

Hefce chief executive, Sir Alan Langlands, said: "This is a challenging financial settlement. We are attempting as far as possible to support a smooth transition for all institutions to the new student finance and funding arrangements which will take effect in academic year 2012-13."

Universities Minister David Willetts said: "Under the new higher education reforms we are putting funding in the hands of students, instead of a centrally allocated grant.

"It is essential that universities move quickly to prepare for the different environment in which they will operate in future years, striving to meet the aspirations of students for high quality teaching."

He forecast that by "2014-15 we expect public support for universities to rise by 10%, as institutions that attract students through high quality courses are given the ability to thrive".

Gareth Thomas, Labour's universities spokesman, warned: "This year is the first of a hugely difficult three years for universities as 80% of the university teaching funds are axed, with some universities set to lose all their public funding.

"The decision to cut so much from university teaching budgets, the massive cut to capital funding and then to load the cost onto the next generation of students by trebling tuition fees is unfair, unnecessary and unsustainable."