Ministers are set to create an ombudsman for higher education, reforming universities' constitutions to end the ancient visitor system and opening all universities to external arbitration.
Plans for a statutory, publicly funded ombudsman, who would examine complaints from both staff and students and would have powers to impose financial sanctions and other remedies, are among models being examined. Firm proposals are expected in April.
Any radical change is expected to require legislation and changes to the constitutions of both old and new universities. Ministers and the Privy Council appear ready to introduce the necessary change, and talks with vice-chancellors have already begun. But the moves could prompt a constitutional battle over institutional autonomy.
In a progress report to the Department for Education and Employment last month, vice-chancellors accepted that an ombudsman is the best way to secure a properly external and independent complaints system.
Universities UK, the vice-chancellors' and principals' organisation, has conceded that existing quasi-judicial complaints systems may not meet the Nolan principles of standards in public life or the requirements of new human rights and freedom of information laws.
But such change would require legislation. UUK chief executive Baroness Warwick wrote to Baroness Blackstone, the higher education minister: "Two groups of universities are presently constrained by their instruments of government from adopting any radical solution to satisfy the principle of independent review."
Figures from the UUK suggest that more than a third of institutions appear to be unhappy with the ombudsman proposal.
Among universities with a visitor, some 65 per cent would like to keep their traditional system and would not appear ready to concede some of their ancient statues too readily.
Greg Wade, director of policy at the Standing Conference of Principals, who has worked on the UUK report, said: "For some institutions, the principle of institutional autonomy is clearly important, and it is a delicate issue. Some of those vice-chancellors with visitors clearly believe it works effectively."
David Anderson Evans, author of the UUK report, said that universities may have little choice but to abandon their visitors if the Privy Council and the Lord Chancellor's Department, which usually act on behalf of most university visitors, decided the system was no longer valid.
A dispute is also looming over the inclusion of staff in the ombudsman plans, with UUK reporting that its board is split over the issue.
Mr Wade said that it was too early to discuss details of the proposed ombudsman's jurisdiction and powers, as there had been insufficient costing or modelling. He confirmed, however, that there was some enthusiasm for a statutory public ombudsman, which would attract proper public funding.
A spokeswoman for Baroness Blackstone said she had just received the UUK letter and had nothing to say at this stage.