South Africa has moved to close for-profit courses being offered by foreign universities, many of them British, through local institutions.
Kader Asmal, the education minister, has asked the nation's public institutions to "terminate these relationships".
He has also threatened to tighten regulations on foreign institutions setting up campuses in South Africa.
Foreign governments and universities have accused South Africa of protectionism and of discriminating against them. They warned that restricting trade in educational services could violate World Trade Organisation rules.
"We are not against foreign universities operating on mutually and culturally beneficial grounds," Professor Asmal reportedly told a parliamentary briefing in Cape Town. "What we seek to avoid is invasion by overseas universities with profit-making aims, which is killing our local institutions."
The government, which is in the process of exerting some control over a burgeoning private tertiary sector, believes foreign universities are riding cheaply on higher education resources subsidised by scarce taxpayers' money.
Dozens of overseas universities are offering degree courses through local state universities and technikons. They charge fees: for instance, students pay R,000 (Pounds 2,600) for a University of Wales masters in business administration run through Wi****ersrand Technikon.
The problem is that state subsidised local staff and facilities are used for the courses.
The government is concerned that foreign universities are making profits using South African public resources for which they may not be paying enough. Also, it fears that local institutions are "double dipping" by being paid to teach overseas courses and exploiting their "brand name" qualifications to attract extra state subsidies based on expanded student enrolments.
The government also fears that it could be viewed as subsidising foreign degrees, which students could use to take their skills abroad.
Professor Asmal is acting against foreign institutions at the same time that the government is clamping down on fly-by-night private colleges. As many as 700 local and foreign private institutions have set up shop in South Africa in recent years.
All private institutions are now obliged by the Higher Education Act to have their courses accredited and to register with the education department - or face being closed. The registration process, however, has been flawed and is very slow because of its complexity and the large numbers of institutions involved.
Only a few foreign universities - including Britain's De Montfort University - have gone through the full registration process.
Registration has sparked acrimony between the government and foreign institutions: last month 37, including 15 British universities, found themselves on a list of 75 "illegal" providers that had not registered. The education department says the main problem is that many foreign institutions do not have a legal presence in South Africa.
But several British universities on the "illegal" list - including Leicester, Manchester and North London - deny operating here at all. Several say they have submitted registration applications, and others say they do not need to register because they offer distance learning courses.
The government and several local vice-chancellors are worried that foreign institutions offering popular degrees are creaming off good lecturers and students from South African universities at a time when student numbers are dwindling.
At a parliamentary committee hearing last month, education director general Thami Mseleku said the government planned to amend the act to regulate foreign competition.
This did not mean international universities would be barred from operating in South Africa. But foreign institutions were presenting the government with "unfair competition", so it might oblige them to adhere to the country's labour laws "and make an undertaking to reflect our demographics within their staff".