New universities have threatened a "guerrilla war" over the government's higher education bill, in a split that threatens both the bill and the future of Universities UK.
The Coalition of Modern Universities is furious that new universities may be sacrificed by ministers desperate to push through a highly divisive bursary scheme. This could present Universities UK with a serious split.
The bursary scheme, understood to be the government's preferred option after crisis talks with vice-chancellors and ministers on Tuesday of this week, is highly divisive.
It will require universities to pay bursaries to poor students out of money raised from charging fees and will directly disadvantage new universities with high numbers of poor students.
Michael Driscoll, chair of the CMU and vice-chancellor of Middlesex University, said: "If the government goes ahead with this, there will be guerrilla war. It is strange to start the legislative programme with built-in opposition."
Peter Knight, vice-chancellor of the University of Central England and one of the keenest supporters of top-up fees among heads of new universities, said: "These proposals deeply wound the bill. The question is whether it is mortal."
He added: "This is one issue where UUK has to decide on a united front."
But this may not be possible.
Alasdair Smith, chair of the 1994 Group of research-intensive universities and vice-chancellor of Sussex University, said: "If the conclusion of discussions is that we will all have individual university bursary schemes funded out of our additional fee income, the 1994 Group will accept that as an essential part of the overall funding package proposed in the bill."
Professor Smith made it clear that his preferred option would have been an enhanced national student maintenance grant.
Michael Sterling, chair of the Russell Group and vice-chancellor of Birmingham University, said the Russell Group's preferred option was an increased maintenance grant. Russell Group universities are worried that any individual bursary scheme, dubbed the "Offa tax" as it could be enforced by the Office for Fair Access, could be too prescriptive.
A spokesperson for UUK said: "UUK has been raising the concerns of its members about some aspects of the proposed higher-education bill." The meetings with the Department for Education and Skills were described as constructive and ongoing.
The government is not expected to announce any concessions to backbenchers until the bill is published, some days after next Wednesday's Queen's speech.
Professor Driscoll said: "I have been meeting Labour backbenchers to explain the new bursary scheme. When they understand how it will work, they decide to vote against it."