Buckingham University wants compensation from the UK Education and Research Networking Association after it spent a week without email or web services when a cable was cut on the national universities' network, Janet.
A third-party contractor cut through a British Telecom cable near the Rutherford Appleton Laboratory in Oxfordshire, where Janet is based. It took a week for the cable to be replaced, leaving the research councils in Swindon and nine other academic institutions without connections from January 26 to February 2.
James Henderson, head of IT at Buckingham, a private university, said: "We get 300 queries a week by email. Eighty per cent of our students come from overseas, so email is important."
He said that it would be difficult to measure the impact of the potential loss of students and business as a result of the outage.
Shirley Woods, customer support director for UKerna, said that the incident occurred in an old airfield when a third-party contractor found BT circuits where they should not have been. She said an inquiry would be launched.
The Economic and Social Research Council and the Particle Physics and Astronomy Research Council extended deadlines for funding applications as a result of information on their websites being inaccessible for a week.