The European Commission has formally requested that the US Government scrap restrictions on European Union "privately funded education services" seeking access to the US markets.
The proposal was one of many made last week to the World Trade Organisation's 103 member governments in the Doha Development Round services negotiations. But Brussels stressed its importance by making it the only request about which it released details. The rest remained confidential for diplomatic reasons.
The US is scheduled to make its response to the EU in May and can be expected to demand a reciprocal response from European governments.
According to Terence Kealey, vice-chancellor of Britain's first independent higher education institution, Buckingham University: "The US market is so much more deregulated than the EU market, and because the Commission wants to deregulate in Europe, it is deliberately bringing this out into the open to make the US pressure the Europeans to deregulate the EU market."
Britain has a relatively open policy on allowing foreign higher education institutions to operate, but that is not necessarily so on the continent, he said.
A spokesperson for the European University Association said: "We're aware of the potential importance and are waiting to see what happens."