Vice-chancellors have accused higher education minister Margaret Hodge of doing "enormous damage" to the international reputation of British higher education, following reports that she was promoting only an elite minority of universities on her recent trade mission to China.
Leaders of the new universities said she had been "grossly irresponsible" in taking just a small delegation of Russell Group vice-chancellors on her trip, and reportedly highlighting their global strengths at the expense of new universities.
It is feared that official acknowledgement for the first time of a clear hierarchy of British universities in last month's white paper will damage Britain's position in the international market.
Manchester University vice-chancellor Sir Martin Harris, who accompanied Ms Hodge, was reported to have said: "[She] talks about 'prestigious' universities, she talks about 'top' universities - that's never happened before, because the British Council has never been able to say that, even if it believed it."
Michael Driscoll, incoming chairman of the Coalition of Modern Universities, told The THES : "If the report is correct, it is grossly irresponsible of a minister on a trade mission to blatantly promote a small group of institutions at the expense of the sector as a whole.
"The minister has a lot of work to do to repair the damage to the sector and the strength of the British higher education brand. This could have a lasting effect on the exports of British higher education to China. A few research-intensive institutions cannot be expected to generate the revenue the whole sector is capable of."
Deian Hopkins, vice-chancellor of South Bank University, which takes more than 400 students a year from China, said: "By playing up the 'prestigious' nature of her Russell Group travelling companions, the inference is that she was playing down the importance of other universities.
"This can only be damaging to universities such as mine that have over many years developed valued relationships with China's most prestigious universities, which have been prepared to deal with us on the basis of quality and delivery, not groundless taxonomies."
He said he would shortly visit China in what had become "an exercise in damage limitation".
A Department for Education and Skills spokesman said the white paper was clear that universities should play to their strengths and recognise that they had different talents, but insisted "there is no question of labelling some universities as second division, as they all have something to offer".