Northumbria University has been criticised by Carlisle MP Eric Martlew over plans to sever links with its campus in Carlisle.
The university is proposing to hand over the campus, which is said to be too small to be viable, to an unidentified institution. There are "key business reasons" for the decision, according to vice-chancellor Kel Fidler.
"Now might be the time to transfer our higher education activities in Carlisle to another provider or group of providers," Professor Fidler said.
"Clearly our hope is that we recover a fair part of our investment."
A university spokesman said it had been anticipated ten years ago that an independent University of Cumbria would eventually be established. Since that had not happened, student growth in Carlisle had been slower than expected.
"Looking at the logistics of the campus in that light, it doesn't make any sense to carry on, so we are talking to a range of providers in the region," he said.
Professor Fidler said that any transfer would be performed with "dignity and fairness, preserving the interests of students and staff". No timetable has been set.
But Mr Martlew said: "Northumbria should be ashamed because it has let down the people of Carlisle and it would be a disaster for the city if the campus were to lie empty."
His attack follows the resignation of campus head Robin Smith, reportedly over the transfer decision, although the university would confirm only that he had resigned for "personal reasons".
The Carlisle campus was established in 1992 and has 400 students and 50 staff. Last year, the university spent £2 million on a new learning resource centre there. Undergraduate and postgraduate courses include business studies, education, English, history with social sciences and tourism.
Professor Fidler said the university had made it clear from the outset that if it was ever appropriate to transfer activities to another institution, it would consider doing so as long asit was in the best interests of Cumbria.
"We have been surprised by the negative feedback as all possibilities are open. We are still recruiting for this year and probably for next year, and we intend to move forward only with the full consultation of staff and students," he said.
Former funding chief Sir Brian Fender conducted a review of higher education in Cumbria earlier this year and ruled out a new campus for the county's 500,000 inhabitants.
Instead, Sir Brian recommended courses jointly delivered by a consortium of institutions close to the area to solve gaps in provision in science, engineering, medicine and languages.
"The small scale of the present campuses is a barrier to expansion because each needs to grow to get closer to an optimal size for financial stability and a reasonable choice of programmes," Sir Brian said.
He identified a need to build a network of collaborating campuses that had the key attributes of a single-campus university.
The report recommends that a core group of institutions take over planning for the region, principally Cumbria Institute of the Arts, St Martin's College, Lancaster, and the universities of Central Lancashire, Lancaster and Northumbria.