Quality watchdogs have accused the University of Lincolnshire and Humberside of complying with a ban on Jewish books.
Auditors say the university accepted censorship of learning materials referring to Jewish authors or their books imposed by its partner college in the United Arab Emirates.
The university has denied the claims, saying the auditors working for the Quality Assurance Agency were "confused".
A QAA report on an audit of franchised degree programmes in tourism and business run in collaboration between the university and Skyline College in the UAE says the courses were affected by cultural and religious rules enforced by the college.
These meant that books with bibliographies including works by authors known to be Jewish were banned from the university library.
The report says the university was aware of the restrictions, but told auditors "they appeared to have little practical effect on the quality of the student experience".
The university's view was that "suitable, alternative materials could almost always be recommended". The audit team, however, "considered that questions of principle were involved, which the university might have been expected to discuss before accepting the situation", the report adds.
Auditors "noted with concern" that the issue was not raised during validation of an MBA or an extension to the tourism course, also run in partnership with the college. They were also "very surprised" that discussion of the issue had not been considered by the university's academic board.
The report says the audit team "would question whether the university could claim that it is delivering to its students in the UAE an education fully comparable to that being delivered to students on the same modules in the UK unless its academic board satisfied itself that the UAE students are able to access all areas of scholarship".
But this week Derek Crothall, pro vice-chancellor, said: "We have never censored any teaching scheme in the UAE. We believe that the QAA became confused between the limited censorship that does go on in the UAE and the university's own reading lists."
John Randall, QAA chief executive, noted there was no reference to the issue by the university in its commentary on the audit at the back of the report.
"I do not recall there being anything said by the university when it had the opportunity to comment on the report," he said.
A spokesman for the Board of Deputies of British Jews said: "Universities have always been at the forefront of combating censorship. The University of Lincolnshire and Humberside betrayed this principle."