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The University of Cambridge; the highest-ranked U.K. institution on the QS table.
The U.S. and the U.K. once again dominated the world's top-ranked universities, with American institutions comprising over half of the top 20 entries, and just under a third of the top 100.
The QS World University Rankings for 2013 also sees the U.K. take six of the top 20 spots, with Cambridge University, University College London (UCL), Imperial College London and Oxford University all making the top 10.
The two highest-ranked institutions were American, with the Massachusetts Institute of Technology (MIT) holding on to the No.1 spot, while Harvard overtook Cambridge to come in at No. 2.
QS bases its world league table on a number of indicators that comprise a certain percentage of a university's final standing. Some 40 percent of the score is down to academic reputation, based on a global survey, while ten percent is based on a survey of employer reputation. Other areas the universities are scored on include faculty/student ratio (20 percent); citations per faculty (20 percent); proportion of international students (5 percent); and proportion of international faculty (5 percent).
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Why UK & US dominate
The international aspect of the QS ratings formula is key to understanding why American and British universities dominate the rankings, compared to their European and Asian rivals.
"Oxford and Cambridge aren't in the top ten of the rankings because English people are more clever than people from say, France and Germany. It's because they get the best people from all over the world because of their reputation," the editor of QS TopUniversities.com, Danny Byrne, told CNBC.
He added that universities wanted to attract foreign students "to internationalize the system; they are trying to become the MITs, Cambridges and Oxfords, which are international centres of excellence."
Commenting on the dominance of American and British universities, QS head of research, Ben Sowter, said Britain had the "prestige factor."
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"Clearly the prestige of a U.K. degree is recognized by employers around the world, and the brand-name value of Oxbridge has so far survived any negative publicity following the tuition fee hikes and student protests," Sowter added.
In the U.S., Byrne stated that when it came to the "citations per faculty" indicator, the country was miles ahead of the opposition, mainly because this indicator heavily favors scientific and technological research and "the top private institutions in the U.S. just operate on a different plane financially."
Challenges ahead
However, while America's cutting-edge research surpasses the U.K.'s, the recession has hit public universities.
"Budget cuts have had an impact on research reputation, and hiring reductions have contributed to higher student-to-faculty ratios at some public institutions," Sowter noted.
Indeed, public funding remains a crucial factor for the U.K. if it wants to maintain, or increase, its presence in the global top 20.
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Wendy Piatt, the director general of the Russell Group – which represents 24 research universities in Britain, including six in QS' top 20 – said a lack of state funding could hit universities' competitiveness.
"Public expenditure on higher education in the U.K. remains far less than the United States, China and other Western European countries. If our universities are to compete in the future they need the Government to provide light-touch regulation and continued investment, and to be welcoming to genuine international students," she said in a statement.
In 2010, Britain faced a number of high-profile student protests when the government said it could no longer subsidise the nation's universities, and increased the annual tuition fees from £3,000 ($4,700) to £9,000 ($14,120). But while tuition fees have filled this gap, they have not helped increase funding.
Byrne said that while a record number (six) of U.K. institutions comprise the top 20, it masks the fact that since the financial crisis, there has been a general downward trend in the performance of other British universities.
The U.K. and the U.S. also face greater competition from Asian universities. Some 70 percent of the 62 Asian institutions in the top 400 this year ranked higher than they did in 2007, as governments in the East massively increase their investment.
In contrast, the 43 public U.S.universities in the top 400 in 2007 lost an average of 20 places each over the last five years, as government funding cuts hit home.
"What the U.K. needs in the future to remain internationally competitive is an increase in funding, and that is unlikely to come from students," Byrne said, and the same can be said of the U.S. as its public institutions struggle.
"In order to ensure universities are able to maintain their positions at the top indefinitely, there is going to need to be an injection of funding to keep up with the increased investment that is taking place elsewhere in the world."
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