Oxford Brookes University is using a funding loophole to charge full-time undergraduate tuition fees of up to Pounds 4,700 a year for "private" courses.
The move was described this week by student union leaders as "enterprising", despite fears that it could lead to the introduction of private fees through the back door.
But senior Oxford Brookes managers have admitted they might have breached funding rules. Charging differential tuition fees has been ruled out by the government. The secretary of state for education, David Blunkett, has the right to withhold funding from universities that charge more than the standard tuition fee of Pounds 1,025 a year.
However, since the courses do not receive money from the funding councils, Oxford Brookes can charge what it likes for them, according to a spokesman for the Higher Education Funding Council for England.
The spokesman said that so long as the university did not offer two parallel courses, one of which was better and more expensive than the other, no rule had been broken.
Oxford Brookes pro vice-chancellor Jim Bradshaw said, however, that "in the context of differential fees, we have got into difficulty," and "we are potentially in breach of the rules."
The courses involved are three-year full-time single honours degrees, in subjects such as accounting and finance, business, economics and marketing management.
The prospectus states: "Applicants should note that the cost of this course is met entirely from course fees and not government grants received by the university."
Tuition fee income could be subsidised from public funds, however, in the same way that private institutions such as the European Business School in London receive subsidies.
Mr Bradshaw said: "We identified an overseas opportunity where there was a large demand for courses and where we didn't have a contract with HEFCE for student places. As soon as a UK or European Union student applies for these courses, we write to them pointing out the charges and redirect them to a similar course."
At least one home student has been confused. The headmaster of Bootham School in York complained that one of his pupils was reconsidering his options after applying. "Universities are introducing private courses via the back door," he said.
A spokesman for the National Union of Students said: "We are entirely opposed to differential tuition fees. However, new universities have been incredibly underfunded and we can't blame Oxford Brookes for going for any source of funding they can get. It is very enterprising."