SAUDI Arabia has sparked a diplomatic incident with Australia's universities.

The Saudis have bluntly suggesting those universities outside the elite sandstones are not good enough to train its future academics.

On the advice of the Saudi Cultural Mission in Canberra, the Saudi Minister for Higher Education Khaled bin Mohammed al Ankary has directed its universities to limit international scholarships for trainee academics to those studying at Australia's so-called Group of Eight. These include the Australian National University and the universities of Melbourne and Sydney.

The correspondence has been passed to Australian universities by concerned Saudi students.

Sector peak body Universities Australia has expressed its "deep concern" at the Saudi stance and asked the mission to retract the "negative connotations".

The mission has since clarified to students that the policy is a preference to have more higher degree research students studying at Group of Eight universities, but that students won't be required to move out of those not in the group

According to an English translation of the mission's letter to the ministry supplied to universities, Cultural Attache Ali Mohammed al Bishri says scholarships for trainee academics are going to Australian universities of "a medium or low level" and it would be better to limit them to the Group of Eight .

In an apparent reference to al Ankary, the letter says "his highness states that he is worried about the low level of these universities".

In response, UA chairman Peter Coaldrake has written to Dr al Bishri, telling him he has been "misinformed on the relative standards of universities in Australia".

The Australian has obtained copies of the correspondence.

Dr al Bishri did not return calls yesterday.

In the UA letter, also circulated to Australia's vice-chancellors, Professor Coaldrake said "all Australian universities are tightly regulated and must adhere to a rigorous regulatory and auditing regime which ensures that the standards of education across all universities in Australia are maintained at a superior level".

Professor Coaldrake noted he was confident the consequences of the letter were unintended but he requested "that you take early action to correct the record".

Shortly after Dr al Bishri's letter was circulated, Saudi students living in Australia wrote to their universities urging them to intervene. Some expressed concern that graduates from non-Group of Eight universities would not get academic jobs in Saudi Arabia. There are claims that some students received letters from their sponsoring Saudi university telling them to switch.

Fahad Alqahtani, a Saudi PhD student at La Trobe University, which is not part of the Group of Eight, said Dr al Bishri had, two weeks ago, personally assured students that other universities were acceptable. "The higher education minister has recommended the Group of Eight universities rather than other universities. But all of them are acceptable, especially for post-graduate studies. He said there is no problem."

Mr Alqahtani, 42, has been living in Melbourne for six years working towards a doctorate in education. He is scheduled to return to Saudi in two weeks to begin work as a university teacher.

Professor Coaldrake yesterday told The Australian that UA's main concern was "the welfare and prospects of the students and protecting the reputation of the Australian higher education sector".

There are about 4000 Saudi students at Australian universities including undergraduates, postgraduates and research students.