A university has been told by the Quality Assurance Agency to review its procedures for terminating links with distance-learning providers.
The watchdog's recommendation follows the decision by the University of Plymouth to end its contract with Moustraining, a Devon-based company that ran two business IT programmes on behalf of the institution.
About 850 part-time students were signed up to the courses, on the use of Microsoft software, which were provided online and part-funded by the university.
Plymouth gave notice in June 2009 that it would not renew its contract with the company, which was set up in 2001 as a commercial spin-off from the university's business school.
Existing students were told that they needed to finish their studies by 2012.
The QAA received a complaint in November 2010, which claimed that the university had not consulted on its withdrawal and had withheld funding for two months from Moustraining.
Plymouth had not given enough time for existing students to complete their courses or to resit exams, it was claimed.
Alex Hammerstein, director of Moustraining, said: "It was an incredibly successful course but we were told it did not fit into their business model any more.
"We never had any problems with recruiting students and feedback was very good. Students had up to five years to complete their courses, so we received many complaints from students when we told them they had only two years.
"We are working flat out with students to ensure as many as possible complete their studies by next July."
The QAA has recommended that the university clarify its academic regulations on similar distance-learning programmes and consider consultation with students before ending courses.
However, it said that the two-year notice period given to students to complete their studies was reasonable and said that there was also no evidence that funding was withheld during negotiations over the run-out phase. It added that there were safeguards in place to protect students' interests.
Mary Watkins, senior deputy vice-chancellor at Plymouth, said: "This was the first occasion on which the university had effectively brought an existing partnership to a close. The QAA review has helpfully highlighted some procedural issues which the university is now addressing.
"The university and its private partner have worked together to ensure that existing students have the opportunity to complete their existing programme and neither the university nor QAA has identified any concerns about the quality of provision."