A new breed of university to focus on science and technology has been touted by David Willetts to make Britain "the best place in the world" in those two subject fields.
But the minister of state for universities and science emphasised there would be no extra public funding to create the institution.
Instead, the aim would be to attract private finance and business sponsorship and possibly help from international partners.
The "science university" is one of the key elements in a grand strategy to boost hi-tech economic growth in the UK and make the best of British science talent.
Outlining the plans at the Policy Exchange think-tank in London on Wednesday, Willetts said: "The government's aim is quite simple if very ambitious: it is that we should be the best place in the world to do science."
Britain is already a world-leading science base, ranked second only to the US in terms of cited research publications, a widely accepted measure of science achievement, according to the Press Association. With 3% of the world's researchers, Britain generates 6% of the world's academic articles, 11% of citations and 14% of the most cited papers.
It was important to sustain the UK's research base through "tough times", said Mr Willetts, who confirmed the government was seeking proposals for the initiative.
"Globalisation is still at its early stages when it comes to higher education," the science minister added. "The next round of new institutions may well link existing British universities with international partners. The surge in international investment in science and technology would make this a key part of the mission of a new foundation.
"It might be that today's institutions propose a new campus or a new international partnership. Or it might be new providers wanting to enter with different models.
"I can announce therefore that the coalition is inviting proposals for a new type of university with a focus on science and technology and on postgraduates.
"Local economic partnerships, universities, businesses and international partners can come together to put forward proposals for new institutions."
"There will be no additional government funding," Mr Willetts continued. "This time we will be looking to private finance and perhaps sponsorship from some of the businesses that are keen to recruit more British graduates.
"For example, we will not be diverting funding from support for undergraduate students. We already have a lot of interest and we want to move this to the next level."
"We will be discussing with the interested organisations how best to carry this initiative forward," said Mr Willetts. "I am confident that with ingenuity we can grow our research base and our universities even when times are tough."
Other proposals and aims include the creation of a new "catapult centre" to stimulate innovation in satellite technology, a 10% growth in external funding for universities over the next three years, and getting more British universities in the world top 100.
Responding to Willetts' proposals, director of communications for the 1994 Group, Mark Fuller, said: “Making the UK the world’s best place to do science is something to which we all aspire.
“The future of postgraduate study is currently under threat from the lack of any sustainable system of financial support for postgraduates. It’s good that the government is starting to address this by calling on proposals for new institutions specialising in postgraduate research, but this must not detract from the needs of postgraduate study in long-established institutions."