Australia's vice-chancellors say the federal government's plans for higher education will reduce university autonomy, adversely affect overseas student numbers and deter poor students from enrolling.
The Australian Vice-Chancellors' Committee is particularly concerned by a proposal to link a A$400 million (£161 million) increase in spending with greater controls over university governance and staff employment.
The government wants membership of university governing councils to be restricted to 21 and to include a majority of external people with commercial experience.
In an attempt to limit union influence over salary rises and improvements in working conditions, the government is insisting that vice-chancellors offer staff individual contracts.
AVCC president Deryck Schreuder said that linking increased spending to changes in governance and workplace relations was the wrong way to achieve reform.
Professor Schreuder said additional grants should be tied directly to the universities' teaching and learning performance - which was their main business.
"This package has the potential to increase, rather than reduce, government intervention in university decisions and autonomy," he said.
Academic and student groups backed the vice-chancellors' criticisms but condemned their support for higher fees and more places for full-fee students.
The National Tertiary Education Union said the government's industrial reforms would lead to confrontation between staff and management and would create "a bureaucratic and administrative nightmare".
The union's general secretary, Grahame McCulloch, said university staff and management were united in the belief that the government needed "to get real and drop its interventionist industrial and governance agenda for the sector".
"The main problems facing universities have nothing to do with increased flexibility," Mr McCulloch said. "The key issues are that staff are increasingly being called on to educate larger numbers of students with fewer resources, are working longer hours and have less job security."
Vice-chancellors welcomed deregulation of government-subsidised tuition fees, which would allow them to increase fees by up to 30 per cent, but said that "substantial contestable funding" should be available to support students from underrepresented groups.
Universities are also concerned that the mix of disciplines in institutions will be set by government, rather than by institutions themselves in response to student demand.