The article examines the extent to which the notion of a publicly-funded university as an institution engaging in both teaching and research is likely to be sustained in the European higher education space of the future, given the variety of pressures (including funding and mass higher education) on such a conception of a university and changes in how national governments regard the purposes of higher education. Relevant literature on the changing purposes of universities is reviewed. For illustrative purposes, the article uses an example of recent legislation, the 2004 Higher Education Act, in England, whereby research degree awarding powers are no longer a pre-requisite for the conferral of university status. The position in England's higher education system with regard to research and teaching is contrasted with that of a second UK country, Scotland, which has contrasting policies on teaching and research in universities. The article examines the research-teaching debate from the perspective of individual academics, universities and policy-makers, using recent empirical data where available. It is suggested that whilst academics and their institutions (for different reasons) may be in favour of retaining a link between teaching and research and may resist changes to this, policy-makers faced with rising demands on the public purse may see such links as suited only to an academic elite. Such pressures apply equally to other member countries of the European Higher Education space, so the outcomes of this policy debate about the centrality of research and teaching to universities have many implications for the future shape of European higher education.