Peterborough still has hopes of establishing its own higher education institution despite Loughborough and Sheffield universities pulling out as partners.
Don Lawson, principal of Peterborough Regional College, which has 1,000 students on ten degree courses, said he hoped the college could become a higher education centre in its own right and would apply for university status within ten years.
The college has appointed Anglia Polytechnic University to validate its degrees, saying it better reflects the ethnic makeup of its student body and could offer less traditional courses.
But a 20-year Peterborough council masterplan to redevelop the city makes no mention of a university.
Local councillor Mohammed Jamil said: "I think Peterborough needs an identity, and a university can help achieve this."
Loughborough began its relationship with the city council several years ago, validating degrees at the college from 1998. Local stakeholders believed this was the first step towards creating a permanent higher education institution in Peterborough. The courses were taught by PRC staff and received high ratings from the Quality Assurance Agency.
Five years later, the university pulled out, saying its senate had decided to concentrate on developing a site next to its central campus rather than continue with satellite operations.
"We were quite shaken at the time," Mr Lawson said. "We were working in good faith."
Mr Lawson said that the Loughborough endeavour had not been particularly successful, with uptake of degrees rising significantly only in the past year.
Jennifer Nutkins, head of the academic registry at Loughborough, said: "It became clear to the university last year that any significant investment would be at Loughborough University itself."
She blamed a lack of funding council support for accreditation activity.
"When we came in, we thought there would be public funds to invest."
A spokesman for Sheffield University said it would be concentrating on local colleges after ten years of validating PRC degrees.