The European Commission was this week urgently revising its new Socrates exchange programme following the loss of a major British player and warnings of a Europe-wide credibility crisis.
The commission is modifying its regulations after universities expressed outrage over the bureaucracy surrounding Socrates contracts to support staff and student exchanges.
De Montfort University, which has longstanding European links, has rejected its contract from the commission for the coming year as "totally unacceptable". It said the contract created "excessive administrative costs out of all proportion to the benefits enjoyed".
The prestigious Coimbra group of European universities has warned the commission that Socrates "risks losing all credibility", with institutions questioning their future involvement unless contractual restrictions are removed.
John Reilly, director of the United Kingdom Socrates-Erasmus Council, said: "The commission has responded in a very helpful and positive way to the anxieties institutions expressed."
The commission aims to ease financial problems with proposals later this year for students to be able to transfer grants from their home member state to another member state. It says this inflexibility has been a key obstacle to mobility, and that the problems will only be exacerbated as more countries join the EU.