Former education secretary Estelle Morris has warned against government interference in education leadership and centralised target-setting without full consultation with the sector.
Ms Morris told a recent seminar at the London Business School that to effect significant change in the public sector, leaders had to have the freedom to make mistakes.
She said: "Government needs to give people in the public sector permission to be good leaders and not jump on people's heads when things go wrong."
Ms Morris' comments come as the government is taking an ever-closer interest in leadership and management in higher education.
It is creating a leadership foundation for higher education, in conjunction with Universities UK and the Standing Conference of Principals, which is intended to develop better leadership, management and governance.
Seminar delegate Adrian Smith, principal of Queen Mary, University of London, said: "How can we get away from the current situation where you have laid down the rules about everything, earmarked every bit of funding and have vicious and regular auditing? All these things lessen the capacity for creative leadership and management. It would all be a lot more interesting and creative if one were trusted to do things and audited afterwards."
Speaking at the seminar, organised by the Social Market Foundation think-tank, Ms Morris said that setting targets was a legitimate government tool for improving public-sector services. But she said that all the groups with an interest in the targets should be consulted before setting them.
The government's 50 per cent higher education participation target, to be hit by 2010, was set by prime minister Tony Blair at the Labour Party conference in 1999 and took higher education leaders by surprise.
Ms Morris also said that public expectations of the quality of service provided by the public sector were "sky high". But she said the belief that you get what you pay for in the private sector does not translate to a similar belief among taxpayers.
Ms Morris, now minister for the arts, was education secretary from June 2001 to October 2002. She resigned after the government failed to hit its literacy and numeracy targets for primary school children.