Oxford University has slipped down an international league table of the world's top universities which also reveals the advance of academia in Asia that will soon pose a challenge to the Ivy League and Oxbridge.

Oxford fell from fourth to joint fifth place with Imperial College London in the QS/Times Higher Education rankings, published today, widening the gap with Cambridge which was rated second in the world. University College London (UCL) leapfrogged Oxford coming fourth after Yale, Cambridge and Harvard.

Overall the UK still punches above its weight, second only to the US. It has four out of the top 10 slots and 18 in the top 100. But there has been a significant fall in the number of North American universities in the top 100, from 42 in 2008 to 36 in 2009. The number of Asian universities in the top 100 increased from 14 to 16. The University of Tokyo, at 22, is the highest ranked Asian university, ahead of the University of Hong Kong at 24.

Leading UK universities said institutions in Japan, South Korea and Hong Kong were "snapping at the heels" of western institutions arguing they needed more funding to compete on the global stage.

Earlier this week the outgoing vice-chancellor of Oxford warned the university needs more than £1bn investment in the next decade to bring "unfit for purpose" facilities up to a world-class standard. John Hood said the university was budgeting to make a loss for the fourth year in a row.

"From a financial perspective these are genuinely worrying times," he said. "Government budgets are over-stressed and endowments are extremely volatile, as are the markets for our entrepreneurial activities."Yesterday Oxford expressed surprise at its fall in the table. A spokesperson said: "League table rankings can vary as they often use different methods to measure success, but Oxford University's position is surprising given that Oxford … has come first in every national league table."

The rankings are based on an international survey of 9,000 academics, how influential the institution's research is and measures of teaching quality and ability to recruit staff and students abroad.

Wendy Piatt, director general of the Russell Group of Universities, said: "The broad message of these tables is clear – the leading UK research universities are held in high esteem internationally but countries like China and Korea, which are investing massively in their best institutions, are snapping at our heels.

"The precise accuracy of league tables like this can be debated but there is no mistaking the alarm bell warning that our success is at risk if we as a nation don't take action to fight off such fierce competition."

She added that the UK was less well-funded than its competitors and if public spending cuts hit budgets they would be under increasing pressure. Universities are currently arguing for improved funding in a forthcoming review of the student finance system, to be launched by the government within weeks. They are increasingly calling for fees to be increased to safeguard the quality of their teaching.

The league table rates teaching quality according to the staff to student ratio. A recent report by the Higher Education Funding Council for England suggested some students were struggling to get enough contact time with tutors.

Phil Baty, the deputy editor of Times Higher Education magazine which published the tables, said: "Oxford comes out with perfect scores on reputation but citations per staff have slipped slightly while UCL has improved dramatically. It's very tight at the very top so a relatively small change can move the pecking order. Spending on higher education in Asia is phenomenal and that's why you see their results going up."