Oxford University and the Open University have been in discussions about establishing a collaborative venture, Open Oxford, that would bring together the OU's experience of distance learning with the Oxford name.
The venture, where courses would be offered at all levels, would be a competitor for the e-university, being set up by the funding councils.
It was put on hold after last year's crash of the dotcoms, but a senior Oxford source said that the idea had been dropped only "temporarily".
David Holmes, Oxford University registrar, said: "We have had initial discussions with the OU about a possible collaboration in online learning, however no firm proposals have been tabled."
OU pro vice-chancellor Geoff Peters said: "We may well do something with Oxford in the future, but in the meantime we are also in discussions with several other internationally recognised universities in the UK about using the word 'Open' and their name."
The Oxford source said the venture would solve the university's "access dynamic": "The university is very scared of down-grading its degree and insists on a residential requirement. Under Open Oxford, students who do extremely well through distance learning in their first year could be invited to come to study at a college. Students who continue to study entirely through distance learning could be awarded a degree with a different title," said the source.
Professor Peters said: "A range of courses could be offered in this way and, depending on the qualification, students could receive a joint award, an 'Open Oxford' award or an OU award."
There is already collaboration between the two universities. Students studying some subjects at the OU can do part of their degrees at Oxford's continuing education department through the credit accumulation and transfer scheme.
Open Oxford would give both universities a substantial global presence, allowing them to compete internationally for students. Oxford has several courses on the internet. On one of them, a diploma in computing, 38 students have just graduated with 11 distinctions between them.
This compares with two distinctions out of 12 for students who studied the course in the traditional way. Jonathan Darby, director of Technology-Assisted Lifelong Learning, part of the continuing education department, said: "The students studying via the internet came in with marginally lower qualifications than those on the conventional course. Learning via the internet allows students to re-access material, to go over and over something they have not understood. It may also give students from non-traditional backgrounds the confidence to excel."
Oxford is also developing its on-line provision through its alliance for lifelong learning with the universities of Princeton, Stanford and Yale. The alliance plans to offer non-credit courses using new technologies and is carrying out market research.
The government's e-university, announced by education secretary David Blunkett in February 2000, aims to be a new vehicle for delivering higher education over the net. The government has given £62 million to the project over three years. Funding council chiefs are due to announce in the coming few weeks which commercial companies have been selected as joint venture partners and who will sit on the e-university's committee for academic quality.