This comes as Otago University and most other New Zealand universities dropped in the annual Times Higher Education World University Rankings, released yesterday.
Prof Hayne and the Tertiary Education Union (TEU) pinned the blame on a lack of government funding, but Tertiary Education Minister Steven Joyce struck back, saying the dip showed universities needed to ''lift their game''.
Speaking as acting chairwoman of Universities New Zealand, Prof Hayne said more government funding was needed to arrest a long-term downward trend in global rankings.
''Without more support from Government, this country's universities run the risk of hitting a tipping point where the best academics choose to work elsewhere and the best students choose to study elsewhere.
''Once you hit that tipping point, international experience shows there's no easy or quick way back.''
''Universities have had to cut the number of staff per student and this has contributed significantly to our drop in rankings.''
Not being able to afford to offer enough support to new academic staff had also had a significant impact.
The steady slide came as global rankings increased in importance over the past decade, with some governments offering scholarships only to highly ranked international universities, she said.
''They are used by international academic staff and students when choosing where to invest in their careers or study.
''Many universities will only partner with or recognise other similarly ranked universities.''
She emphasised New Zealand universities remained quality institutions and were among ''the most efficient in the world''. ''Despite these efforts, we are very concerned about New Zealand's slow but steady drop in these and other rankings.''
Mr Joyce agreed the dip in Otago's ranking would be concerning if the trend continued, but said a lack of funding was not to blame.
''I'm not sure what [Tertiary Education Union vice-president Dr Sandra Grey] or the vice-chancellor mean by a lack of funding.
''The Government has increased direct funding across the university sector by 18.6% over the last five years through tough economic times.
''That includes significant increases in research funding, which Otago has been and will continue to benefit from.''
The drop in rankings reflected an increasingly competitive international university environment, but also indicated New Zealand universities needed to ''work to lift their game'', he said.
''One of the biggest income opportunities available to Otago is to increase its enrolment of international students, which would also bring significant economic benefits to Dunedin as well.''
Dr Grey said what was going on behind the rankings was most concerning.
Flat government funding meant universities were forced to do more with less, placing extra stress on staff, she said.
If this continued, top-quality staff would look for opportunities overseas.
Otago University placed in the 251 to 275 bracket in this year's Times Higher Education World University Rankings, down from 226 to 250 in last year's rankings.
In the QS rankings released last month, it was ranked the 159th best university in the world, down from 155th the year before and 114th in 2007.
Otago University was the second-ranked New Zealand university, behind the University of Auckland, in both tables.
