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A new type of privately-funded science and technology university has been announced by the universities minister.

The graduate institution, intended to promote cutting edge science research, could be set up with international partners and funded by business, David Willetts has said.

It follows a similar initiative in New York, where leading universities were invited to set up a research campus.

Labour says Britain risks losing its world-beating position in science.

In a speech on Wednesday morning, Mr Willetts set out plans for an advanced science research centre, to be created against a background of increasing globalisation and international competition in higher education.

New York project

"The next round of new institutions may well link existing British universities with international partners," the minister said.

"The surge in international investment in science and technology would make this a key part of the mission of a new foundation."

Mr Willetts invited applications to set up this new type of university - but without any additional government funding.

"This time we will be looking to private finance and perhaps sponsorship from some of the businesses that are keen to recruit more British graduates," Mr Willetts said.

Labour's shadow minister for innovation and science, Chi Onwurah, says Britain is "in danger" of losing its world-beating position in science.

Ms Onwurah says the announcement from Mr Willetts "underlines the government's failure so far to support science in the UK".

"Britain is a leading scientific nation: we have a world-beating position in science but we are in danger of losing it," she said in a statement.

"In their 20 months in power, ministers have made the wrong decisions for the long term future of science in Britain: they dismantled the RDAs without an effective replacement, scrapped Labour's long-term research investment framework, cut investment in research and have weakened the Office for Life Sciences."

"Today David Willetts claimed that George Osborne's investment in science capital facilities showed his understanding of the importance of scientific research to our economy, but it was George Osborne who cut it by 40% in his first budget."

Under changes to higher education proposed by the government it will become easier for overseas institutions to set up in this country - in the way that an increasing number of UK and US universities have set up campuses overseas.

The minister says he is taking inspiration from a competition in New York to set up a science research institution which will help to develop hi-tech digital industries.

In the wake of the financial crisis, New York city authorities were concerned about an over-dependence on banking and finance.

There were worries that New York was falling behind the "knowledge hubs" that had developed around universities in Boston and California's Silicon Valley - and that New York might miss out on the creation of jobs in rising digital industries.

As such New York invited universities around the world to bid in a competition to build a science campus in the city - with Cornell University recently announced as the winner, in a partnership with the Technion-Israel Institute of Technology.

'Knowledge hubs'

This new campus will be built on an 11-acre site on the city's Roosevelt Island. It aims to generate £15bn in economic activity in the next three decades.

This New York project is part of a global pattern of investment in research and innovation as a way of protecting future economic competitiveness.

The French government has launched a £30bn grand project to set up a series of "innovation clusters" - in which universities, major companies and research institutions are brought together to develop knowledge-based industries.

Mr Willetts wants a major city in England to offer a site for a technology campus.

He also set out plans to increase non-government funding for universities by 10% and to increase the number of English institutions in the top 100 of university rankings.

There will also be plans for another so-called "catapult centre" for science research, which will focus on satellite technology.

"This will provide business with access to in-orbit test facilities to develop and demonstrate new satellite technologies," Mr Willetts said.

Imran Khan, director of the Campaign for Science and Engineering, said: "The minister is right to underline the challenge facing the UK: we should aim to be the best place in the world for science, but we're currently way behind nations such as Germany, Japan, and the US in terms of business and industry investment in research.

"Today David Willetts reiterated a whole series of positive measures the coalition is taking to incentivise more private sector investment - but no political party has yet outlined a clear alternative vision for the UK economy."