The University of East Anglia's vice chancellor last night said significant falls in this year's world rankings by UK higher education institutions should be seen as a warning to the government.

A combination of a lack of public funding, 'negative vibes' towards international students and academics, and a failure to encourage post-graduate study, was blamed for allowing universities overseas to leapfrog Britain's.

That includes UEA, which has dropped out of the top 150 after slipping more than 30 places – from 145th to joint 176th – in the latest Times Higher Education rankings published last night.

Sites across the UK have seen their positions plummet as those in the Asia-Pacific countries make their mark.

Prof Acton said he believed the UK was still making a very strong impression on the world rankings, with one in seven of the top 200 universities in this country, but he said the drop in position for many should be seen as a warning.

'If we take it for granted that people are always going to think British HE is up the top there, we are going to be very gravely mistaken,' he said. 'We are going to have to work very hard.'

The vice chancellor said he believed the current dip in position for universities including UEA, University of Bristol, and University of St Andrews did not yet reflect a drop in quality but the fact that other countries – particularly in the east – were rapidly improving.

But he added: 'Eventually, if it gets bad enough, the absolute quality of what we offer will also slip.

'That would have repercussions beyond university. It would have major social and cultural repercussions.'

Prof Acton joined Phil Baty, editor of the Times Higher Education rankings, in citing three main reasons for the change.

Mr Baty said: 'Huge investment in top research universities across Asia is starting to pay off. And while the sun rises in the East, England faces a perfect storm: falling public investment in teaching and research; hostile visa conditions discouraging the world's top academics and students from coming here; and serious uncertainty about where our next generation of scholars will come from, with a policy vacuum surrounding postgraduate study.'

Prof Acton has previously spoken out about the government's plans to include international students as part of the net migration cap.

He said the 'negative vibes' towards international students and academics was putting people off studying here. A 'near genius' mathematician had already been prevented from joining the UEA, he said.

The California Institute of Technology was once again judged to be the top university in the world with the University of Oxford improving its position from fourth to joint second, alongside the United State's Stanford University.

The University of Cambridge is now sixth, having dropped one place, with University College London also making it into the top 20.

The UK has seven top-50 universities and 31 in the top 200.

For more reaction, see tomorrow's paper.