The Australian government's plans for higher education reform have been rejected by the senate.
In a scathing report on the reforms proposed by education minister Brendan Nelson, a senate committee describes the policy and its legislation as "unconscionable in almost every respect".
The report says the bills, which have passed through the House of Representatives, should be rejected outright. If the senate agrees to debate the legislation, the committee says they would require substantial amendments and redrafting.
Describing the policy package as a disastrous failure, the committee says that for those seeking radical deregulation of the sector, the principal act provides the opposite of what they asked for.
The report says: "It allows a massive increase in regulation of universities' activities and accords to the minister unprecedented powers to intrude into their affairs and decisions."
Dr Nelson is now attempting to negotiate a compromise with four independent senators and the Australian Vice-Chancellors' Committee, which is also opposed to the plan.
Although the AVCC welcomed the senate's report, it added that senators should debate the higher education legislation this year.
"More than two years of discussion and debate have culminated in this report," AVCC president Deryck Schreuder said. "It is now time to move forwards and reach a resolution on Australian higher education."
The AVCC met the minister to set out the amendments it believes are necessary. According to Professor Schreuder, vice-chancellor of the University of Western Australia, Dr Nelson's statement that he was prepared to "remove every unnecessarily intrusive requirement" being imposed on universities indicated that the government was prepared to negotiate.
The senate report accuses the government of diminishing the role and status of universities through heavy-handed regulation.
"These bills will initiate a regime which will shift costs to students. It will stifle student choice and impose a heavy burden on families. These bills will deepen inequities in society and undermine economic and social prosperity," it says.
Alan Gilbert, vice-chancellor of Melbourne University, also attacked the legislation. Although he is one of the strongest supporters of top-up fees, Professor Gilbert described the power given to the minister in the bill to ban courses of which he disapproves as "downright dangerous".
He said the move would give the government the sort of prerogatives normally associated with authoritarian regimes that fear strong, independent universities and "feel the need to curtail academic freedom".
"If that is the outcome of the Nelson reform agenda, Australian higher education, sadly, will be better off without it," he said. "The reform is indeed vital and long overdue. But reform of the kind proposed is downright dangerous."
The senate established the select committee to consider the proposed reforms last September. As well as receiving almost 500 submissions, the committee held meetings across the country and heard from 150witnesses.
The report says that the evidence from the witnesses and the submissions reveals desperation among universities. This was indicated in most cases by vice-chancellors who faced a humiliating trade-off between gaining additional money and maintaining control of their own affairs.
It says: "The promise of increased funding is dangled before their eyes, but they are aware that the cost is subservience to bureaucratic control.
"An impression was gained that the more optimistic vice-chancellors believed that something would be worked out in time for the bill to pass the senate: that the minister could be appealed to that good sense would prevail," it adds.
But the committee clearly believes this is unlikely. It warns that adoption of the legislation would introduce a "brave new world" of compliant institutions stripped of their autonomy and academic freedom.