Edinburgh University’s precarious financial position points to a failure of the government’s funding model, according to opposition parties.

The university has warned stap of an “urgent gap” in its finances which could lead to programmes and schools being closed.

An email, sent to all staff by Principal Peter Mathieson, said significant cost-cutting measures would be needed in the near future and “nothing is off the table”.

In November, the university warned staff it would have to make job cuts in response to “unsustainable” funding and a voluntary redundancy scheme recently opened.

A spokeswoman said the university wanted to be transparent with staff and it had extended the deadline to its voluntary redundancy scheme.

The University and College Union (UCU) branch at the university urged management to rule out compulsory redundancies.

Its members recently passed a vote of no confidence in the principal and senior management at the university, with a final count of 265 to 25.

The university principal said potential cost-cutting measures could include “restructuring, possible closures of programmes or even schools, mergers or shared services between Schools, centralisation of some services, outsourcing of others”.

Mr Mathieson said he understood that the email would cause “anxiety and uncertainty”, but it was best to be honest about “the scale and urgency of the measures likely to be needed”. The executive board will update staff next week after considering its financial position.

Edinburgh is the latest university to come under financial pressure from rising costs and reduced income from international students. The University of Dundee revealed a potential deficit of £30m in November.

Conservative education spokesperson Miles Briggs said the current funding model is “short-changing universities”.

He said: “This stark warning from Edinburgh’s principal, which will cause alarm and anxiety among staff and students, is just the latest siren call from a leading Scottish university over its perilous financial position.”

Willie Rennie, education spokesperson for the Liberal Democrats calle on the government to “act fast” to avoid job losses.

He said: “The government is in danger of sleepwalking into a disaster in our university sector. There needs to be an acknowledgment that the current financing model is just not fit for purpose.”

A Scottish government spokesperson said: “While this is ultimately a matter for Edinburgh as an autonomous institution, we recognise that staff and students will be worried.

“We encourage the university to carefully consider its proposals in line with our Fair Work principles, and to work with trade unions to ensure staff are treated fairly.

“Both the Scottish government and Scottish Funding Council engage closely with universities and we value the important contribution they make to the economy and wider society.”