Only about 15% of the money provided to universities by the government for each undergraduate student is actually being spent on teaching them, according to new research.

As education minister Batt O'Keeffe finalises his plans to reintroduce third-level fees, the Trinity College Dublin study suggests that students and their parents are already being used as "cash cows" for the wider university system.

This is because the funding they attract may effectively be subsidising the generous wages of senior management and non-teaching academics, with little or no benefit to the quality of education which undergraduate students themselves receive.

This has prompted fresh questions about how efficiently current resources are being used.

Charles Larkin, an economist at TCD, examined the university's hugely popular Business, Economic and Social Studies (BESS) course by comparing the funding it receives per student from the exchequer with the teaching hours they receive. He found that the Department of Finance pays out an average of €13,330 per student, which is distributed via a number of government departments.

Based on around 370 students studying BESS, this means the amount of money leaving the department is almost €5m. But the amount spent on teachers delivering lectures and tutorials is around €739,000, just 15% of the total.

Larkin said the ARAM (Academic Resource Allocation Model) system of allocation in TCD, which is now being reviewed, is widely copied in other universities, meaning the results of his research are likely to be replicated elsewhere.

"The real question is, in the context of the potential to reintroduce fees, is where does the rest of the money go? What is the real economic cost of educating an undergraduate for three or four years to BA level?," he asked. "Looking at the resources, it appears that teaching... is not a financial priority."

One student with direct experience of the life of an undergraduate student is Roslyn Kelly, who is in her first year in BESS. She regularly attends packed lectures, and while she is enjoying her course, she is concerned about the size of the class. "It is one person talking to 300 to 400 people in the room," she says. "It is not ideal in terms of making friends, or in terms of learning. I just don't know if I find learning and lectures effective."

Larkin noted that his study did not include other overheads such as the cost of providing physical infrastructure such as lecture halls and libraries, and heating or lighting costs. Nor did it include funding available through student registration fees of almost €1,000.

University professors and lecturers here are significantly better paid than their counterparts in France, Germany or the UK, he added. "The question of fees needs to be placed within this context. In a higher education sector that has not been critically assessed financially or economically these questions need to be answered."