Lecturers are demanding the right to refuse to teach students who express racist or fascist views, or who are known members of far-right political groups.
The Association of University Teachers is grappling with the "profound implications" of calls to uphold its members' right not to teach racist students in a consultation paper on the increasing activity on campuses of groups such as the British National Party.
"We believe strongly in education as a civilising force, which may not be compatible with the view that teachers have a moral right to exclude students whose views they find repugnant," the consultation paper says.
A motion put to the union's winter conference by Leeds AUT was referred to the executive for consideration. It said that institutions must recognise "that for some members of staff, there will be an issue of conscience...
(and they) should not be required to teach such students if they find it ethically difficult to do so".
It called on the union to support members who assert this right and are consequently penalised by their employers.
An identical motion from Newcastle AUT was narrowly prevented from being forced back on the agenda at the summer conference earlier this month, on the grounds that it was still under consideration.
The consultation paper says university managers must take their "legal and moral" responsibilities to protect staff and students from racists much more seriously but warns of "serious potential difficulties" in adopting the position advocated by Leeds.
Refusal to teach students because of their views, as opposed to their actions, "raises the immediate question of which views might or might not be treated as a justification for a refusal to teach", it says. "Such a stance also may not be considered to sit easily with the association's insistence on freedom of thought."
Staff have a contractual obligation to teach, which would be broken if a lecturer decided not to teach a student. "In such circumstances, the association would, of course, offer whatever help or support it could, but it would be very dangerous and irresponsible to convey the message to members that they could rely on their union to protect them from the consequences of (their) actions."
Tony Lecomber, a spokesman for the BNP, said lecturers did "not have a right to refuse to teach anyone. They have got no right to deny an education to anyone for any reason, and if they try that we will be exercising our group rights under European law.
"If these arseholes from the education sector want to try it on, we look forward to bankrupting them with a lawsuit."
Universities UK said: "Universities are multicultural and multinational communities that believe strongly in the freedom of speech and action within the law. We believe equally strongly that discrimination based on nationality, race, religion or other grounds is wrong."