Universities have been hit with a second round of mid-year funding cuts in as many years, after the Coalition moved to slash $328.5 million in research funding in Monday's economic update.

The amount is double what had been flagged by Education Minister Dan Tehan in November and comes a year after a $2.1 billion cut saw funding frozen and places capped across the sector.

University funding is set to re-emerge as a key election battle after taking a back seat during the school funding wars. Institutions have begun campaigning against the changes ahead of an expected May poll, earning the support of Labor which has pledged $10 billion to uncapping places if elected.

University research funding has been cut. Credit:Louise Kennerley

Universities Australia estimates the cuts will hit research intensive universities in NSW hardest, with a reduction of $91 million in funding availability to that state alone.