A leading academic has warned that the Government has little alternative but to introduce college fees after the country's universities tumbled down world rankings.
Professor Tom Begley, who recently stepped down as Dean of UCD's Smurfit Business School, said the underfunding of colleges was leading to an exodus of top professors.
The shortage of resources was also affecting staff-to-student ratios, and this was hitting the international standing of the universities, he said.
Professor Begley, who left UCD to take up a post in New York, was responding to the latest Times Higher Education's World University Rankings in which both Trinity College and UCD have dropped out of the top 100 -- Trinity is now ranked at 117 in the college chart, while UCD has fallen to 159.
Prof Begley said the reputation of Irish universities had suffered as a result of the economic collapse.
And he said that when he was Dean of the Smurfit Business School, the college had tried to recruit a Professor of Banking and Finance.
"We had a candidate lined up, and everything was almost signed and in place. But the candidate pulled out because he feared that there would be no banks left in Ireland.
"When a country suffers such a financial setback as Ireland has, it damages the standing of universities.''
The Times Higher Education Survey gauges the reputation of colleges, using a poll of 17,000 senior academics. Phil Baty, editor of the rankings, said the teaching reputation of Irish universities, including Trinity College and UCD, had declined.
However, he said that Trinity and UCD did fare very well in the quality of their research.
This is measured using the number of times they were cited in scholarly articles and books.
Baty said Trinity and UCD also scored well in international outlook, which measures their ability to recruit students, researchers and staff from abroad.
Sooner or later Minister for Education Ruairi Quinn is going to have to bite the bullet on third-level funding.
The recent Hunt report on Higher Education estimated that an extra €500m was needed to plug the gap in college funding by 2020.
One senior university manager told the Irish Independent that fees of around €5,000 a year were needed to put universities on a sound footing.
Prof Begley, who now has a senior management position at the Renselaer Polytechnic Institute, argues that fees are the only option.
"I don't see any other way of ensuring that there is a consistent level of funding for universities in Ireland.''
When he left Ireland, Prof Begley criticised certain aspects of the Irish system.
He described the Leaving Cert as dysfunctional and suggested that it should be taken out into a field and blown up.
Academics now fear that the standing of Irish universities is likely to collapse further.
The former president of Dublin City University, Professor Ferdinand von Prondzynski, predicted that Trinity College and UCD would slip out of the top 200 in the rankings next year.
"The drop in the standings of our universities will take two or three years to reverse,'' said Prondzynski, principal and vice chancellor of Robert Gordon University in Aberdeen.
"A well-functioning university system was the foundation for the Celtic Tiger economy. It is absolutely vital if the economy is to recover.
"The entire university system in Ireland is paralysed, because of underfunding.''
He claimed that Irish universities were "technically insolvent''.
"There is virtually no extra capital funding going in and as a result the infrastructure is in danger of collapsing.
"A lot of computers and other equipment are out of date, and redecoration is often not happening.
"Because universities cannot replace staff, the age profile of academics is becoming too old.''
Ruairi Quinn is reluctant to reintroduce fees.
Since their abolition in 1995 by the then minister Niamh Bhreathnach, the policy has become one of Labour's sacred cows
Professor Von Prondzynski has long believed that the scrapping of fees was a mistake, and was simply a subsidy to the middle classes.
However, he said their reintroduction wasn't the only alternative to our present funding crisis available to the Government.
"In Scotland they have chosen to redirect resources towards third-level education, because they realise the effect that it can have on the economy.''
With Ireland's finances still in a dire state and Michael Noonan about to wield a large knife in the forthcoming Budget, Quinn has little room for manoeuvre.
However, if he wants to maintain standards he will have to act decisively soon or else the standing of Irish universities will keep sliding well into the middle of the decade.
Irish students and their parents may be annoyed by the rising contribution charges in our colleges, but how would they cope with the fees charged at some of the world's top universities?
California Institute of Technology -- commonly known as Caltech -- topped the Times Higher Education chart. It charges average fees of €26,000 per year. Harvard, in second place, charges €25,000.
Between staff and students, Caltech, a small private college in Pasadena, has produced no fewer than 31 Nobel Prize-winners. Caltech pipped Harvard for top spot by increasing its research funding by 16 pc last year.
As well as high academic standards, the college is famous for its student pranks.
In 1987, students from the college changed California's famous Hollywood sign to read Caltech by covering up parts of the letters.