Heads of further education colleges that deliver higher education courses are worried that white paper proposals will pit them against universities in a fight for foundation degree students.
Members of the Mixed Economy Group of colleges, whose institutions provide about 11 per cent of higher education in England, fear that more universities may try to muscle their way into the foundation degree market.
They are concerned that new universities, particularly those that have been finding it hard to recruit, may switch from the role of foundation degree validators to providers to try to seize a share of the only funding available for expansion from next year.
White paper proposals for the creation of a national network of universities to validate foundation degrees could also give universities the opportunity to dominate the market, they have warned.
Some college principals believe that if this were to happen, foundation degrees could become more academic and less attractive to employers. As a result, employer involvement - a vital component of the first generation of foundation degrees - could be weakened or lost.
Meg group members, who met in Ipswich last week, said colleges needed to assert themselves quickly in the foundation-degree market and bid for places on the proposed validation network.
Some also believe that colleges should be entitled to a share of any top-up fees that partner universities charge, in recognition of their role in helping universities comply with access rules.
Roger Lowans, vice-principal of Newcastle College, said colleges needed to protect and build on the important work they have already done in forging employer links to develop foundation degrees.
He said: "There is a fear that universities will try to get in on the delivery of foundation degrees. For some of the universities that are not recruiting so well, that will be a temptation."
Peter Hymans, director of higher education for Doncaster College, warned:
"Some universities may look for anything that would give them a viable base, perhaps at the expense of higher education in further education."
Penny Blackie, higher education partnerships manager for City College Manchester, said there could be difficulties with the validation network if it did not include college representatives.
Ron Pritchard, principal of North East Surrey College of Technology, said there was a "serious risk that some universities might want to major in foundation degrees". But he added: "Colleges do have a head start, and we are tuned in to local needs."
Colleges should feel well placed to bid for a share of any top-up fees charged by partner universities, he added.
Christine Davis, principal of Farnborough College of Technology, said colleges should not rule out charging top-up fees themselves.
"Our agenda is about widening participation, but we should be very wary about saying 'never' to top-up fees.
"We do not know what the underlying policy is in terms of the cost of courses and their funding," she said.