Student groups, academic leaders and opposition politicians criticized a new deal for Nova Scotia universities that will see base funding for post-secondary institutions cut for the second year in a row.

The provincial government announced a three-year memorandum of understanding with university presidents on Thursday.

The province's 11 universities will get a grant of $324 million for 2012-13 — three per cent less than they received for this academic year.

Rebecca Rose, of the Canadian Federation of Students, said the announcement means students will see already high tuition fees rise further and the quality of education suffer.

"Students are going to be paying more and they're going to be getting less," she said.

"It means that it's going to be harder for families to send their children to post-secondary education and once they get there, the quality's going to be diminished."

Marilyn More, the provincial Minister of Advanced Education, said the three-per-cent cut was necessary as the government searches for ways to cut spending.

Universities have already gone through a four-per-cent reduction in the previous year.

"What we're trying to do is to balance the accessibility and affordability of post-secondary education in this province with the ability of the taxpayer to pay it," More told reporters.

"We're not asking universities to do anything different than we're asking school boards and hospitals and district health authorities. As a province we all have to be part of the solution."

She acknowledged that it may be difficult for universities to adjust to successive cuts, but said the days of substantial increases were over.

"We cannot afford the growth in costs of providing the programs and services that we've had in the past," said More.

"I don't deny that difficult decisions will have to be made."

The province is making $25 million available to universities in a fund designed to cushion the blow, but that money is contingent on the universities finding savings equivalent to the amount they receive from the province.

Tuition cap only guaranteed for one year

John Harker, the president of Cape Breton University, said the two-year cuts are equivalent to about $75 million when inflation is factored in.

"If we can do a bit more with less, we will, but to assume that it's going to be easy is really a triumph of hope over experience," he told CBC News.

"We do not have fat. We do not have spare capacity. We are actually now nationally competitive and, I believe, internationally competitive."

Mark Coffin, the executive director of the Alliance of Nova Scotia Student Associations, said students in university will feel the effects of the back-to-back budget cuts.

"They're going to see larger class sizes," he told reporters.

"They're going to see fewer classes taught by full-time faculty, more classes taught by part-time faculty and they're going to see declines in services that the universities are able to provide."

Coffin said he's also concerned the province's three per cent cap on tuition increases is only guaranteed for one year.

Rose said Nova Scotia's government is out of step with other governments in the country.

"Every other province is either maintaining their core funding in post-secondary education or they are increasing funding to post-secondary education," she said.

"So I don't know why we're the only province that is cutting and going in this direction, but it seems backwards."

Plan slammed by Opposition

The Opposition immediately slammed the NDP government for cutting university funding after recently announcing a $50-million package to keep the Bowater Mersey paper mill near Liverpool open. They also pointed to a $14-million deal to keep forestry operations viable after the shutdown of the NewPage paper mill in Port Hawkesbury.

Liberal Leader Stephen McNeil said the memorandum of understanding lacked any long-term planning for university spending and leaves a lot of uncertainty over tuition hikes in the next few years.

"This report has done nothing in my view but drive up tuition and actually put in jeopardy the kind of quality [education] we're going to be able to present to the next generation of young Nova Scotians," he said.

"They are going to try to download that blame to the universities when it actual fact, it is government that is causing this to happen."

According to Statistics Canada, average undergraduate tuition fees in the province are $5,731, making them some of the highest in the country.