Vice-chancellors fear that the Bett report may place them in a pay and conditions straitjacket if it recommends a national wages structure as expected.
Leaks from the Bett report, due to be published later this month, indicate that the committee will recommend the retention of a broad national framework for the determination of pay and conditions for both academic and non-academic staff.
An unspecified amount of freedom will be allowed within the national framework for institutional adaptations, according to details leaked to The THES.
A number of vice-chancellors, however, are concerned that the level of local freedom within the national framework may be insufficient to cover an increasingly diverse sector for which income and expenditure flexibility is key.
Peter Knight, vice-chancellor of the University of Central England, has been determining pay locally for the past four years. He said: "It sounds as if we may be heading back to the 1960s. But the sector is far more diverse than it was.
"For instance, income comes from far more diverse sources. Most universities now get significant amounts of income from sources other than the government, such as contracts with the NHS. It is nonsense to think that these contracts will be uprated to take account of any national pay settlement."
Roderick Floud, vice-chancellor of London Guildhall University, refused to speculate on the outcome of Bett.
He said: "The devil will be in the detail. My personal view is that, on the basis of the leaks, there is a lot that is going to have to be sorted out."
The fears are echoed by the Universities Personnel Association. Chairman Larry Bunt told The THES that as the sector became more diverse, it was almost inevitable that pay and rewards would become more diverse too.
Most vice-chancellors seem to back the submission made to the Bett inquiry by the Universities and Colleges Employers' Association. This asked for substantial local flexibility on pay and conditions. UCEA chief executive Peter Humphries declined to comment on Bett.
Whatever the detail, Bett could cost the sector around Pounds 450 million if all the likely recommendations on pay rises are implemented.
Lecturing union members are hoping that recent comments from lifelong learning minster George Mudie signal that the government has not ruled out funding the Bett pay bill. But minsters have yet to make a clear statement.
Speaking at lecturers' union Natfhe's annual conference last weekend, Mr Mudie said: "Contrary to reports in the press, the Bett report is not subject to a ministerial decision."
The Bett recommendations will have little impact on planned industrial action this year. The Association of University Teachers, which held a one-day strike last week over the current 3.5 per cent pay offer, will start a rolling campaign of action aimed at disrupting administrative procedures at universities.
The examinations and admissions processes are prime targets. Students will still be able to sit their exams, but marking may be delayed. Similarly, students will be able to apply to university, but delays are inevitable, according to the AUT.
Natfhe will almost certainly join the AUT in industrial action in the autumn, unless it is offered significantly more than 3.5 per cent.