The University of Wollongong has retained its position as one of the world’s top 300 universities.

UOW was again placed in the 276-300 bracket of this year's Times Higher Education world university rankings, making it the 13th-ranked institution in Australia.

A UOW spokeswoman said the university climbed 16 places, from 298 to 282, within the bracket.

Overall Australia's universities climbed up the world rankings, with almost every top institution improving its standing on last year.

But there are fears Australia's impressive performance could be short-lived in light of the federal government's plan to deregulate tuition fees.

Eight Australian universities made the top 200 in this year's Times Higher Education world university rankings, led by Melbourne University at number 33.

The University of Sydney was the top-ranked institution in NSW – jumping from 72 to 60 – and third in the country after the Australian National University at number 45.

The editor of the Times Higher Education magazine, Phil Baty, said Australia's strong performance, as the fifth best represented country, demonstrated the country had a "world-class system".

But he questioned whether the "strength-in-depth" could be maintained with the federal government's plan to fully deregulate fees from 2016.

"The reforms may help a small Australian elite protect or even improve their global standing, but what about the rest?" he asked. "Are we going to see a greater polarisation in Australia between a global super-elite and a large number of also-rans declining?"

Professor Peter Booth, the provost at the University of Technology, Sydney, said deregulation of itself would not improve or undermine the performance of Australian universities.

"The issue will be if universities cannot maintain a basic level of funding to continue offering a wide range of quality programs," he said.

The vice-chancellor of the University of Sydney, Dr Michael Spence, said Australian universities would "continue to perform strongly on the world stage regardless of higher education fee structures".

The University of NSW has been one of the fastest rising universities in recent years, coming in at 109 this year, up 64 places since 2011.

The university's vice-chancellor, Fred Hilmer, said he was pleased to see such dramatic improvement but was sceptical about the stability of the rankings.

"Universities alter very gradually over time – it's difficult to explain these massive changes," Professor Hilmer said.

The annual rankings are based on 13 performance indicators, including industry income, teaching, research influence and international outlook.

A further 12 Australian universities were named in the 200 to 400 bracket, including the University of Technology, Sydney, the University of Newcastle, the University of Wollongong, Macquarie University and the University of Western Sydney.

The California Institute of Technology held on to the world number one spot for the fourth consecutive year, followed by Harvard University in second and the University of Oxford in third.

While still the best performing country, 60 per cent of institutions in the United States lost ground this year, while Britain saw three of its top universities drop from the top 200.

Mr Baty said the rankings were evidence of a power shift away from Western countries.

"There is little doubt that key east Asian nations have emerged as powerhouses in global higher education and research, while traditional leaders, including the UK, Canada and the US, risk losing significant ground in the global knowledge economy," he said.

A spokesman for Education Minister Christopher Pyne said the government's proposed changes to higher education were necessary because the status quo was unsustainable.

"Unless the reforms are passed, we risk falling behind our Asian competitors and these rankings show that in just 12 months there are four new Asian universities in the top 200 with 24 in total."

Australia's Top Universities 

• University of Melbourne: 33 (up from 34)
• Australian National University: 45 (up from 48)
• University of Sydney: 60 (up from 72)
• University of Queensland: 65 (down from 63)
• Monash University: 83 (up from 91)
• University of NSW: 109 (up from 114)
• University of Western Australia: 157 (up from 168)
• University of Adelaide: 164 (up from 201-225)

• California Institute of Technology (US): 1 (unchanged)
• Harvard University (US): 2 (unchanged)
• University of Oxford (Britain): 3 (down from 2)
• Stanford University (US): 4 (unchanged)
• University of Cambridge (Britain): 5 (up from 7)
• Massachusetts Institute of Technology (US): 6 (down from 5)
• Princeton University (US): 7 (up from 6)
• University of California, Berkeley (US): 8 (unchanged)
• Imperial College London (Britain): 9 (up from 10)
• Yale University (US): 9 (up from 11)

with SMH