The federal government will examine slashing billions of dollars worth of research funding from universities if Parliament blocks its sweeping higher education changes.

University vice-chancellors are alarmed by the "doomsday scenario", which they say would damage Australia's $10 billion export market for international university students.

The federal government could look at cutting research funding from universities, if Parliament blocks it's planned changes. Credit:Louise Kennerley

Education Minister Christopher Pyne plans to introduce legislation into the House of Representatives on Thursday to deregulate university fees, cut course funding by an average 20 per cent and increase the interest charged on student loans.

Labor, the Greens and balance of power senators in the Palmer United Party say they are opposed to all these measures.