Scotland could devise radical new definitions of further and higher education, making it easier for universities and colleges to forge innovative links.
The Scottish Executive is urging a rethink of the concept of a unified tertiary education sector as it moves towards merging the higher and further education funding councils.
It has issued a discussion document - prior to consulting formally next year on the merger - asking whether the current legal definitions of further and higher education are helpful, given the emphasis on lifelong learning.
It says that a definition of different levels of education is important in establishing, for example, ministerial powers and duties and eligibility for student support.
The current definitions produce anomalies, it says, with higher national certificate and diploma courses falling under both definitions. These anomalies could, arguably, be barriers to change.
The paper suggests that alternative definitions could be based on Scotland's pioneering qualifications framework, which has created a "national language" for all mainstream qualifications.
The Scottish Credit and Qualifications Framework runs from basic education at level 1 to PhDs at level 10, with higher national certificates and the first year of an undergraduate degree ranked at level 7. Higher national diplomas and the second year of a degree are ranked at level 8.
The source of funding currently depends on institution type rather than course level. Colleges provide around a quarter of Scotland's higher education, mainly via higher national courses, but their funding comes the Scottish Further Education Funding Council.
The Scottish Executive stresses that the councils will stay in charge of how funding methodology is applied but it believes that a single body will make it easier to support closer links between colleges and universities.
Jim Wallace, deputy first minister and minister for lifelong learning, said: "We are convinced that merging the funding councils will create greater transparency, comparability and parity of esteem between the higher and further education sectors."
* The Association of Scottish Colleges has warned that Scotland should not allow itself to be "thrown off-course" in developing its lifelong learning strategy because of fears over the impact of England's white paper.
It said that such concerns could result in spending plans being skewed, even though for colleges, significant providers of higher education, "competition with England is not a major concern".