SAUDI Arabia has smoothed over tensions with Australia's universities.

It has backed off from apparent plans for its PhD students to shun most of the sector in favour of the eight research-intensive sandstones.

At a meeting with peak body Universities Australia in Canberra, Saudi officials confirmed that postgraduate students would be able to study where the best research and supervision was available.

As revealed by The Australian last week the Saudi Cultural Mission in Canberra caused consternation and embarrassment when it advised its Ministry of Higher of Education it was worried that research students were studying outside the Group of Eight at universities of "medium or low level".

In a recommendation adopted by the ministry it said scholarships for such students, who could be expected to become academics in their homeland, should be limited to the Group of Eight.

But in a letter circulated to all vice-chancellors yesterday, UA noted that the Saudis had told them their policy to "rebalance" research students towards Group of Eight universities had been "subject to some subtle linguistic mistranslations and misrepresentations".

But The Australian has verified the translation of the Cultural Mission's advice, circulated to universities by worried Saudi students.

UA last week wrote to the Cultural Mission asking it to retract the "negative connotations". The Saudis have confirmed students won't be asked to transfer to Group of Eight universities based on directives from the Cultural Mission.

In managing any requests by students to move to a different university they said, "deliberations aren't based on estimates of relative institutional quality by the mission".

In its letter UA chief executive Glen Withers said the Saudis were rebalancing student numbers "to ensure the principle of wide distribution of students throughout Australian university campuses".

"This re-balancing is currently focusing on the Go8 universities, where numbers of enrolled Saudi students are under-represented for higher degrees by research students."

Of the 4123 Saudi students enrolled in higher education in Australia just 465 are higher degree research students.

Of these about 27 per cent are enrolled in the Group of Eight, compared with about 50 per cent for research students across the international cohort.

Saudi Arabia has for the second year running suspended sending King Abdullah Scholarship Program students to Australia, arguing there was an "over-saturation of Saudi students" at some campuses.