MANCHESTER University plans to shed hundreds of jobs after going £30m into debt.

As many as 400 teaching and support posts could be axed and bosses are seeking volunteers for redundancy or early retirement. The university became the biggest in the country after a merger with Umist in 2004 and the 11,000 campus employees were given a two-year commitment that jobs would be safe.

But in a letter to staff, university president Alan Gilbert said some job cuts were now inevitable to ensure future growth.

The university - which has recently hired academic big names including author Martin Amis - now has 40,000 students and aims to become one of the world's top 25 universities by 2015.

Governors had approved a planned debt of £10m to sign up new teaching staff, including the `superstar' lecturers, and the university carried over a £10m historic debt following its merger.

The annual budget has also been hit by higher-than-expected wage increases and a large rise in utility costs to push the university a total of £30m into the red.

Mr Gilbert said in his letter: "Mergers always create unnecessary duplication, but in order to give the new institution two years to settle down a formal understanding was reached with the relevant trade unions that the new university would delay for two years any loss of jobs arising from any merger.

"But ambitious agendas are never without cost. We now face the major, unavoidable challenge of addressing these two deficits in order to bring the university budget back into surplus."

University officials insisted that all losses would be through voluntary redundancy or early retirement. Officials of the University and College Union, which represents lecturers, said they were in talks with the university.