Financial statements released by the University have revealed that, last year, Vice-Chancellor Professor Andrew Hamilton received a salary package worth £382,000.

The figure, which includes salary and pension, is 17% higher than what his predecessor, Dr John Hood, received in 2009.

It also emerged that a senior University administrator was paid almost £600,000, and that over 70 Oxford University employees earn a higher basic salary than the Prime Minister.

The news comes just weeks after MPs voted to raise the cap on tuition fees to a maximum of £9,000 and as universities face 40% in cuts to their government funding.

In a statement the University Press Office defended the rise, saying that “Oxford is one of the great universities of the world and makes a major contribution to the economic prosperity of the UK and the UK’s position in the world, as well as to tackling global challenges through its research.

“It must remain globally competitive and its Vice-Chancellor’s remuneration needs to reflect that.”

James Butler of the Oxford Education Campaign said that he was struck by arguments about global competitiveness.

He said, “It feeds the idea that universities should be modelled under the logic of competition. The University, in its public statements, has been committed against the marketisation of education, but this is not reflected in the way it remunerates its administrative staff.”

He added that “It’s telling that we’re paying our administrators more than those who carry out the day to day functions of education.”

An investigation by the Daily Telegraph showed that salaries of top UK university staff rose by an average of 8%.

However, not all university leaders have followed suit. Last year, the Vice-Chancellor of University College London, Professor Malcolm Grant, took a 10% cut in his salary.

He took this cut in his salary to “symbolise” the University’s “determination to come through a deep recession without sacrificing our reputation for high quality research”.

A spokesperson from Oxford University Press Office highlighted that Hamilton does not receive the highest Vice-Chancellor salary in the UK, “despite the fact that according to every national league table in 2010, Oxford was the number one university in the country”.

Some are questioning whether the increase in the salary of the Vice-Chancellor is, in fact, justified. The university topped all the UK national league tables this year and the Times and the Guardian have placed it in the number one spot consistently since 2007. Oxford also achieved its highest ever THES world ranking, joint second, back in 2007, under the previous Vice-Chancellor.

The annual financial statements also show that the Director of Oxford University Endowment Management Limited (OUEM) is the highest paid university administrator in the UK.

Sandra Robertson was paid almost £600,000 last year, though her salary comes directly from revenues generated by the OUEM.

A spokesperson pointed out that “Investing in good fund managers more than pays for itself: consider the fact that even just a one percentage point difference in investment performance can mean a difference of several million pounds every year for the University.

“Good investment management is more important than ever at a time of uncertain funding for higher education.”

Political Theory postgraduate student Alex Canfor-Dumas blasted the top level salaries as “fundamentally unjust”. He argued that “To anyone who doesn’t believe in a market free-for-all, these sums of money are absolutely outrageous. At a time when millions are seeing their real incomes fall, we risk seeing a tiny elite stretch ever further ahead, undermining the sense of solidarity that binds society together.”

However, third year PPE student Henry Curr said that, although inequality in general is a problem, the singling out of highly paid individuals is wrong. He commented, “I’m sick of these witch hunts into how much people earn. The idea that cutting one person’s salary would be enough to keep tuition fees down is ludicrous.”

Last year, Business Secretary Vince Cable and Higher Education Minister David Willetts wrote to every university and college head telling them that they expected universities to apply the same “restraint to all aspects of pay and bonuses” as their department for business, innovation and skills was applying.

Cable reflected that, “There is clearly salary escalation at the top level that bears no relation to the underlying economics of the country.”

This idea resonated with St Hilda’s student Robin Driver, who commented, “I guess I can kind of appreciate the argument that we need to be attracting the talent. But it seems a highly insensitive move at a time when students are still reeling from the increase on the fees cap”.

Philip Walker, spokesperson for the Higher Education Funding Council for England, said, ‘”It is for each university’s governing body to determine, through its remuneration committee, the pay and other benefits of its vice-chancellor or principal.

“The governing body is the employer, and so must decide – and be prepared to justify – what is appropriate in each case, taking account of all the circumstances of the institution and the individual.”