THE University of Reading (UoR) has hit back at suggestions it is in £300m of debt – following reports of a potential conflict of interest, as the sole trustee of a charity.

An investigation has been launched into the sale of land belonging to the National Institute for Research in Dairying trust.

According to the Guardian, the UoR reported itself to regulators over a £121m loan, which was replaced with the equivalent of IOUs in the trust’s accounts.

This money was spent by the university, which has since started to investigate whether or not there was a conflict of interest.

An admission has already been made by university staff that the standards of governance had not been met – as the only trustee of the charity – intended to fund agricultural research.

However, the university has responded to the Guardian report, suggesting it is in a much more healthy financial position.

A spokesman said: "We do not recognise this as an accurate representation of the university’s finances.

"The UoR is in a sound position following changes to the UK higher education sector over the past decade and has robust plans in place to deal with current and future challenges.

"The university is confident that it has responded appropriately to the issues relating to the sale of land, that formed part of the assets of the National Institute for Research in Dairying trust.

"The details have already been set out in the University’s published financial statements.

"The appropriate governance arrangements are now in place relating to the university’s management of the trust and this matter has no wider implications for the university’s ongoing financial position.

"We remain a respected institution with excellent teaching and research and the university is in a strong position to meet the future with confidence."

With the university's financial problems of late well-documented, a debt of £300m would prove difficult to pay back.

After being established in 1912, the institute was replaced in 1985 and the assets were passed on the trust, with the university being the only beneficiary.

The university is in the top 30 in the UK, but has suffered from extensive financial problems in recent years.

A decline in the number of students and operating losses of more than £40m in the last two years have compounded this latest revelation.

The Charity Commission and Office for Students have both been informed.