This was decided at a two-day meeting of senior Saarc officials in New Delhi.

The university, intended to be a centre of excellence, will be set up in the vicinity of Delhi and is expected to be functional by July 2009.

India has offered to bear the entire cost of setting up the university which was proposed by Prime Minister Manmohan Singh at the 13th Saarc summit in Dhaka in 2005.

The Indian side informed the meeting that 250 acres of land is being acquired on the outskirts of Delhi for setting up the university which is expected to be a non-profit public-private partnership.

Gowhar Rizvi, director of Ash Institution of Democratic Governance and Innovations at Harvard University who was entrusted with the task of preparing a concept note, has recommended a middle path between government-funded and private education to facilitate autonomy from bureaucratic stranglehold while maintaining social commitment towards the have-nots.

The role of the governments of eight member countries will have to be confined to provision of capital for setting up the institution.

Once fully operational, the governments will not be expected to provide annual subsidies and grants, Rizvi said, adding the university will have to look for private and corporate donors without allowing them to influence its administrative and academic autonomy.