Johannesburg — Institutions with more African and coloured South African students studying "full time" on their campuses will get more money from the government next year.

In addition, the smaller the total number of students, the more funding an institution will get by way of government subsidies , according to a controversial funding shake-up by the Education Department.

The formula has been described by historically white institutions as penalising them, but has been hailed by black universities as redressing past inequalities.

Historically white institutions said it was also unfair because they struggled to get black students in their science faculties from the small pool of matriculants who pass maths each year.

Tertiary institutions should get R8.6-billion in subsidies next year. A n extra R500-million could be allocated to those with small student enrolment and a high number of disadvantaged students.

The department said this was to compensate smaller institutions offering a variety of qualifications with few physical resources.

Institutions with more than 20 000 students will get nothing while those with a student body of less than 4 000 will get an additional 15% as a supplement on teaching grants, the funding policy says.

Professor Ian Bunting, acting director in the department's higher education section, said institutions with a high number of disadvantaged students would benefit from an extra allocated R300-million.

The definition in this regard refers to African and coloured South African students.

"When an institution has a high proportion of disadvantaged students, it has to offer a higher level of teaching services than those with a high number of advantaged students," Bunting said.

Historically black institutions, which are generally smaller but with a large number of disadvantaged students, stand to benefit from the policy most.

Professor Mushe Nkondo, vice-chancellor of the University of Venda, said he had been vocal about the need for redress.

"We are very happy that the Minister of Education has considered our plea. This is going to make a big impact on how we run our institutions," he said.

But the University of Pretoria said the new funding formula would penalise white institutions, resulting in fees rising to "cover the shortfall".

"The proposed funding formula will penalise the 11 000 black students enrolled . . . and has a potential to arrest the gains we have made thus far. These black students will be subsidised at levels lower than those applicable to their peers at traditionally black institutions," the university said.

University of the Witwatersrand, where 8 705 of the 19 853 students are black, also said it should not be penalised for being an urban institution.

"While the country is in a period of redress, it is inevitable that the focus is on such activities. Should institutions achieve the demography of the economically active population in the cities in which they operate, [ they] should not be disincentivised," said university registrar Derek Swemmer.