SAUDI assertions most Australian unis are not good enough to train its academics could threaten the sector's international standing.

International Education Association of Australia executive director Dennis Murray said the "negative connotations" cast on institutions outside the eight elite sandstone universities could spread unless the federal government was more proactive.

Universities Australia has officially complained to the Saudi Cultural Mission in Canberra, asking it to retract the negative connotations cast on non-group of eight universities.

As revealed by The Australian yesterday, the Saudi Ministry of Higher Education earlier this year instructed its universities to limit scholarships for trainee Saudi academics in Australia to those attending one of the group of eight: the Australian National University in Canberra, Monash and Melbourne universities, and the universities of  Queensland, Western Australia, Adelaide, Sydney and NSW.

This followed advice from the Saudi Cultural Mission in Canberra, which had voiced concerns that many students were studying at "medium- or low-level" Australian universities.

According to Saudi students in Australia, the Saudis have since backed away from the policy, notifying them that they simply have a preference for postgraduate research students to be at a group of eight university.

Some discussion between the Saudis and Australian universities has already taken place to try to clarify the situation and to limit the fallout.

Mr Murray said Australia's $18bn-a-year international education industry was already braced for a downturn as commencements dropped because of tighter immigration rules and tougher offshore competition.

"There is a danger that Australian education will increasingly be viewed by foreign governments as of middling or even lesser quality," Mr Murray told The Weekend Australian yesterday.

"Warnings about this by the education sector have been ignored and written off, even at the highest levels of government, with the consequences we are now beginning to see."

But a spokesman for Education Minister Simon Crean said the government's measures would safeguard the quality of the Australian education brand.

"Australia remains a favoured destination for higher education international students," he said.

The government has tightened regulations and immigration to crack down on dodgy colleges and migration fraud. But the sector complains that the changes have been too rushed and will cause unnecessary damage.

In 2009-10, the Department of Immigration granted 750 postgraduate research visas to Saudis, on top of 519 in 2008-09 and 405 in 2007-08. John Rosenberg, deputy vice-chancellor international at La Trobe University, which has about 300 Saudi students, noted that strong research groups existed at universities outside of the group of eight.