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Cambridge has slipped down an authoritative list of international university rankings in a league table of top universities published on Tuesday.
It was ousted from second place in the QS World University Rankings by Harvard University; both were behind the Massachusetts Institute of Technology in the list of the world's leading universities.
The UK was represented in the top 10 by Cambridge in third and Oxford slipping back one place to sixth, with London's University College and Imperial College sandwiched between them. Stanford and Yale trail the British quartet in seventh and eighth, with Cal-Tech and Princeton completing the top 10.
The QS rankings included a record number of UK institutions in the top 20, with Edinburgh and King's College London entering for the first time at 17th and 19th respectively.
Coventry was among 15 UK institutions named as a leading university in the QS rankings, which represent the top 4% of international higher education institutions and take into account subject range, research output and academic reputation of more than 3,000 universities around the globe.
David Willetts, the universities minister, said it was fantastic news for UK universities, academics and students, but warned the sector not to get complacent as universities still needed to work hard to remain world class.
He said: "Our reforms to undergraduate finance have put universities on a sustainable financial footing and sharpened incentives to deliver a world-class student experience. We have protected research funding, encouraging universities to invest in cutting-edge research. And we are helping our universities make the most of the growing opportunities globally through our international education strategy."
According to the table, graduates from Oxford and Cambridge were rated as the most employable in the world, with London School of Economics also included in the top five.
While UK universities retain a strong reputation among employers, the rankings suggest they are struggling to keep up with the US when it comes to producing cutting-edge research.
Cambridge was the sole UK institution to make the top 30 for research citations – while only UCL, Oxford and Imperial joined it in the top 50.
John O'Leary, member of the QS global academic advisory board, said: "The UK invests below the OECD average in higher education, so it is unrealistic to expect its universities to continue to punch above their weight indefinitely.
"The current success of leading institutions shows how vital it is that the government matches the investments being made by other countries in order to maintain their world-class status."
Of the 45 UK universities that make the top 400 in the world, 29 rank lower now than they did at the time of the financial crisis. A total of 21 UK institutions have dropped more than 10 places since the recession, while just five rank more than 10 places higher than in 2007.
For Coventry University, the ranking was a further sign of its recent rise. This year it achieved its highest ranking yet in the Guardian's UK university guide of 33rd overall.
There were 14 other UK newcomers to the top 800, including the universities of Kingston, Keele, Stirling, Ulster, Middlesex, London Metropolitan, Plymouth, Hertfordshire, Manchester Metropolitan, Robert Gordon, Greenwich, Northumbria, East London and Nottingham Trent.
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