Postgraduate research students are increasingly being used as 'slave labour' to cut teaching costs at universities across the UK, a London conference heard yesterday.

They warned teaching conditions were getting dramatically worse as academic cuts bite and universities are under mounting pressure to cut costs.

PhD students – occupying the precarious first rung on the academic career ladder – are the most vulnerable group amongst teaching staff, working on short-term contracts and increasingly pressured into working for free. Ever more aspiring academics are being used as cheap substitutes for more experienced but expensive senior lecturers. Academics warned that undergraduate students being asked to pay a total of £27,000 in tuition fees for their degrees are becoming more vociferous about being taught by junior academic staff. In one incident a heated dispute arose between students and PhD teaching staff over the marking of essays.

Another PhD student recounted how he was required to supervise 13 undergraduate dissertations involving hours of daily unpaid work. And as a result of dwindling student numbers and funding cuts, a number of former polytechnics have already announced there will be no paid teaching places for PhD students at all in the coming year.

The claims were made as young academics from across the country gathered in London to launch a campaign aimed at improving working conditions for PhD students teaching at British universities. Jenny Thatcher, a 27-year-old PhD student in Migration Studies teaching at the University of East London, where PhD students are hired as hourly paid lecturers, said: "We have become main face of academia, but we don't get any office space, decent pay or job security. And if you consider that undergraduate students are now paying 27,000 for their degrees, that is a cause for great concern, as we are unable to provide proper support.

"The situation also benefits those research students privileged enough to be able to work for free, and it disadvantages women, as many women tend to work part time because of domestic responsibilities and are often not in a position to work for free."

Kerem Nisancioglu, 28, a postgraduate research student at the University of Sussex, said: "Generally, we are given short-term contracts, are paid at hourly rates that are in no way commensurate with the actual workload, nor are they equivalent to the same work carried out by faculty. It feels like our work is not being valued."

Robin Burrett, of the National Union of Students and a PhD student at the London School of Economics, told the conference called to launch a campaign to improve working conditions for postgrad teaching staff, that: "PhD students engaged in teaching work are in a vulnerable position, as the institution they work for is the same institution that will give them a mark at the end of their studies.

"Universities faced with funding cuts are increasingly in competition with other universities, departments with departments and individual academics with other academics, and PhD students are bearing the brunt of the need to cut costs."

The conference called for the Universities and Colleges Union (UCU) and the National Union of Students (NUS) to launch an inquiry into the conditions PhD students face.