The University of East Anglia's vice chancellor last night said significant falls in this year's world rankings by British higher education institutions are 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.

UEA 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 Britain have seen their positions plummet, as those in the Asia-Pacific countries make their mark.

Professor Edward Acton said he believed Britain 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 higher education 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, the University of Bristol, and the 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 a net migration cap.

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

The California Institute of Technology was once again judged the world's top university. The University of Oxford is joint second, the University of Cambridge sixth, Imperial College London remains eighth, and the University College London also makes it into the top 20. Britain has seven top-50 universities.

Prof Acton said he was 'disappointed' with the UEA's position but that 'some annual fluctuation' was to be expected.

He added: 'I think our investment in both the education and the research in the last few years makes me optimistic that our average figure over the years will steadily rise.'