The government has banned universities and colleges from using the title "University for Industry" in a surprise move to protect the brand name.
The schemes hit include Sunderland University's UfI North East project, the pilot for the national UfI programme designed to promote lifelong learning. Sunderland has used the UfI title in all its advertising and now has to remove it.
Some institutions running the schemes are concerned that the move will wipe out the hard work they have put into establishing the UfI name and concept with people who would not normally take a further or higher education course.
A member of the UfI policy team said that the Department for Education and Employment had made a "practical decision" to have the UfI title removed from the development projects because the UfI had not been established as a company and therefore did not exist legally.
"We are still working on the core components of what the UfI will deliver and how it will work," he said. The idea behind the ban is to protect the brand name, ensuring that it will only be used by the fully developed UfI.
The order to drop UfI from project titles was issued through Ecotec, the organisation managing a Pounds 70 million European fund called "Adapt" on behalf of the DFEE.
The fund has been used to back more than 200 projects across the country - most of which will be run by universities and colleges - designed to develop ideas contained in the UfI prospectus.
Institutions were invited in February this year to bid for "Adapt UfI funding" and to tailor their projects to the UfI agenda. Many assumed they could use the title and did so in drawing up plans and approaching co-sponsors.
The EC allowed the government to bend the rules covering Adapt funds, and the government now finds itself in difficulties.
The EC rules governing these funds require that projects must be transnational and for public/private partnerships - not for government-run schemes. But the government secured concessions from Brussels because Britain was the only member state that had not already spent its Adapt entitlement.
Brussels allowed the government to use the money for a national project and to pump-prime a government initiative. Because the money was coming through Brussels and not through the DFEE the government became alarmed that it could lose control of the UfI name.
Mike Thorne, a member of the UfI transitional team and former pro vice-chancellor of Sunderland University, said Adapt projects were piloting UfI work, but were not officially part of the UfI.
UfI project leaders at Sunderland University, whose former vice-chancellor Anne Wright is chief executive of the UfI programme at the DFEE, are understood to be concerned about the uncertainty of the UfI title.
Like all Adapt bidders, Sunderland was required to contribute 55 per cent of project costs itself, amounting to over Pounds 5 million.
Matthew Evans, chairman of Faber and Faber a member of the UfI advisory group, said: "There could be problems if these projects are having to be re-branded. The UfI project at Sunderland has always been the lead scheme. There has to be greater clarity on how all these projects relate to each other."
Steve Molyneux is a UfI adviser and IBM professor of interactive communication technology at Wolverhampton University, one of the successful Adapt bidders. He said the government was paying the price for failing to consult with Europe, higher education institutions and industry over its UfI plans.
"They should not have allowed Sunderland to use the UfI title unless it was getting government funding for UfI. If that was the case, then everyone should have got the chance to have a bite of the cherry," he said.
The government is about to announce the location of its UfI headquarters. Sources say Sunderland's bid to become the headquarters has been rejected. Shortlisted sites include Swindon, Sheffield, Derby, Leicester and Birmingham.