Education chief Atsuko Toyama said Tuesday her ministry will withhold government grants earmarked for Teikyo University for the current fiscal year and ask the private school to refund part of the grants it received over the last five years.

Tax authorities have determined that the university's medical school collected donations worth 14 billion yen over the last seven years from parents of students not yet formally enrolled.

Toyama also said the ministry will not allow Teikyo Heisei University, a Teikyo group school, to open a new academic course in apparent punishment for the group's improper solicitation of donations.

No university has been barred from opening a new course or department since 1986, the ministry said.

Speaking after a Cabinet meeting Tuesday, Toyama said the punishment stems from the insufficient in-house report the school submitted to the ministry Monday.

"The report has utterly failed to convince society," Toyama said. "I doubt this is the way a school of a highly public nature should behave."

The ministry will conduct an on-site investigation at Teikyo University and ask the Tokyo-based school to submit another report, she said.

In the Monday report, Teikyo University admitted in effect that it accepted donations from students' parents before enrollment in violation of a ministry ban on the practice.

It said it received donations from 9.9 percent of the students who had already passed their entrance exams but had not yet formally enrolled in the medical school.

The report pins the blame on two former secretaries general of the medical school, who it claimed "acted on their own judgment and responsibility."

Teikyo University declined in the spring to accept 1.1 billion yen in government grants in a second installment for fiscal 2001, saying it did so because it had "incensed the public." Between 1998 and 2000, the school received about 1.7 billion yen in subsidies.

It also withdrew its application for opening a new course, though it later applied for the same course to be set up at Teikyo Heisei University.

On Monday, lawmaker Kazuaki Miyaji resigned as senior vice health minister over a scandal in which he allegedly used his political clout to help the grandson of a key supporter get into Teikyo University's medical school, after the applicant twice failed the school's entrance exam.

10% pay donations

Teikyo University has admitted it took donations over the past five years from nearly 10 percent of its students before they were formally enrolled but insists there is nothing unethical about the practice.

The education ministry bans universities from accepting donations from students before enrollment.

The university, which has been implicated over questionable donations surrounding admissions to its medical school, said it has never taken donations from students before they took entrance exams. The donations had no impact on how the entrance exams were graded, it added.

On Monday, the university submitted a report to the education ministry, detailing an internal probe conducted into money donations from students.

Ministry officials later criticized Teikyo's report as vague and demanded that the university submit more details concerning its practice of taking donations from students.

The report says the university has taken donations from 9.9 percent of students who had already passed their entrance exams even though they were not formally enrolled at the time.

Meanwhile, tax authorities have accused Teikyo Ikuei Zaidan, a nonprofit group associated with Teikyo University, of evading tax on 6.5 billion yen in income.