Abertay University 'to remain independent'
Dundee's three higher education institutions have announced there is no possibility of them merging.
Abertay University, Dundee University and Dundee College will all remain independent, a joint statement with the Scottish Funding Council confirmed.
However, the bodies will discuss how they can achieve "closer collaboration" in a bid to save money.
The decision was reached after "very open and positive discussions", the statement said.
Abertay University was thought to be particularly vulnerable to any plans to merge some Scottish universities.
It has 4,250 students, making it one of the smallest universities in the UK, and is located close to Dundee University, which has more than 17,000 students.
With only a minority of its income coming from sources such as research grants and overseas students, Abertay depends on the Scottish government for 60% of its funding.
The university was also asked to suspend its search for a new principal, although this process has now resumed.
A joint statement said the three institutions would remain "autonomous and independent bodies, with distinctive missions, visions and values".
It added: "The three institutions have further agreed, with the support of the Scottish Funding Council, to engage in detailed discussions on options for closer collaboration that will enhance their contribution to achieving the Scottish government's aims and objectives for post-16 education across Scotland."
Future talks will examine how similar courses could be aligned "more closely", initially in life sciences and sports education.
The aim would be "maximising opportunities" for students wanting to progress from further to higher education.
Scottish Education Secretary Michael Russell said: "This is precisely the kind of collaborative thinking that lies behind the Scottish government's post-16 agenda.
"I am delighted to see three institutions of such repute cementing their relationship in such a way that will improve the delivery of further and higher education locally, but also have a bearing on Scotland's international reputation for excellence in education."