Academic staff at Swansea Institute of Higher Education recorded a vote of no confidence in principal Gerald Stockdale and two other senior managers this week after weeks of publicity surrounding the overseas franchise operation.
The Welsh Office and the Higher Education Funding Council for Wales could be asked to investigate the organisation of the overseas courses after a meeting of the governing body next week.
The University of Wales, the validating authority for the institute's higher degrees, is already planning its own investigation later this month after bringing forward by a year its quinquennial review of the franchise operation, which involves courses in Malaysia, China, Finland and Spain.
Some 108 staff voted for the motion of no confidence in Professor Stockdale, vice principal Hywel Rees and Brychan Williams, dean of the international office. Eighteen staff voted against and five abstained.
According to staff who were present at the meeting, Professor Stockdale publicly stated he would resign if the vote went against him.
The Welsh Funding Council last year raised concern over the financial dealings of the overseas operation which brings in around Pounds 400,000.
Confidential documents reveal that the institute's internal auditors KPMG told the Welsh funding council's audit service that the accounting of the overseas development account was outside the institute's normal accounting system. Alun Bowen, a senior partner at KPMG, concluded that the internal report highlighted major concerns over the operation of the overseas development account.
Val Feld, a governor of the institute, said: "I shall be arguing at the governors' meeting next Monday that we must take the staff concerns extremely seriously. The greatest worry is that the activity surrounding overseas courses will damage the institute in Swansea."
She said the governors would have to decide who should be present at the meeting because all three senior managers named in the vote of no confidence have links with the governing body.
Professors Stockdale, Williams and Rees were unavailable for comment.