Higher education's only national organisation fighting admissions fraud is facing the withdrawal of "essential" financial support from the Department for Education and Employment.
The Universities and Colleges Admissions Service's verification unit, which claims to save the Exchequer millions of pounds a year by preventing admissions fraud, has been told by the DFEE that funding this year is unlikely.
The blow comes during clearing, the period when universities are most vulnerable to fraudulent admissions. Clearing this year is expected to be particularly chaotic as students rush to enter higher education before the introduction of tuition fees.
The news also comes after the arrest last month of five men who are being held on remand by Hertfordshire police for conspiracy to defraud universities and banks of over Pounds 500,000.
The UCAS verification unit was set up in 1993 to tackle admissions fraud. It was established with a Pounds 120,000 grant from the DFEE. Last year, that was reduced to Pounds 70,000, but this year, said UCAS chief executive Tony Higgins, "it doesn't look like they'll give any money".
"The work we do saves the Exchequer millions of pounds a year," said Mr Higgins. "A few hundred thousand from the public purse is a very small amount to ask. I don't want to bleat about the DFEE, I understand the pressures on its finances, but this is very annoying."
UCAS will now fund the unit with money from its commercial operations, diverting resources from other plans, said Mr Higgins.
"We do this for nothing," said Alan Ball, manager of the verification unit. "There is nothing in it for UCAS other than the benefits to society as a whole, and the chance to increase the number of places for legitimate students that are taken up by fraudsters. If we can't afford to run this unit, it will be a disaster."
The "classic fraud scenario", said Mr Ball, is the bogus application. An individual applies to universities with a fictitious name and details, is made an offer, enrols on the course, picks up a grant and a student loan, and disappears.
Enrolment on a university course is also used as the basis for opening bank accounts, and running up student overdrafts, said Mr Ball. The verification unit compiles a database of fraudsters, and circulates a monthly suspect list to higher education institutions and local authorities.
UCAS has just published an anti-fraud guidebook in time for clearing. In it, Committee of Vice Chancellors and Principals chief executive Diana Warwick warns: "UK universities and colleges, as custodians of over Pounds 7 billion of public money, must continue to play their part in the effort to combat fraud."
A DFEE spokeswoman said: "We have funded the capital costs of the unit. We did say at the beginning that we wouldn't be funding running costs. For the first two years UCAS said it needed more money and we helped. This year we've said no. We value what the unit does, but other people have to chip in. We will reconsider when we complete our review in October."