Heriot-Watt University, in partnership with Scottish Enterprise, is to absorb Scottish Knowledge and rebrand it as the Interactive University.
It has set itself a target of generating £5 million in student fees by 2004-05 from 3,000 students studying business and finance, management, information technology and foundation science and engineering programmes.
News International, which was a commercial partner in Scottish Knowledge and which publishes The THES , has withdrawn from a £3.5 million deal with the project, after two years and eight months.