Three higher-education institutions in south-east Wales should merge to form a single super-university, according to a report from the sector's funding agency. The University of Wales Institute of Cardiff and University of Wales, Newport, are already in discussions about a merger. But similar talks between UWIC and the University of Glamorgan in Pontypridd foundered last year. The report, from the Higher Education Funding Council for Wales, says the three institutions together could form a distinctive new university of national standing and better meet the needs of students and the Welsh economy. But competitive pressures could lead to a "spiral of decline"if they decide to go their separate ways.