Universities have been accused of acting like "turkeys fighting over who will get it at Christmas" when they should be putting up a united front against funding cuts.
Addressing a fringe meeting at the Labour Party conference in Brighton this week, Malcolm McVicar, vice-chancellor of the University of Central Lancashire, said the sector was "divided internally".
He said: "It weakens itself by competition from within. The last thing universities should be saying is 'leave us alone and hit those other buggers'."
Dr McVicar told Times Higher Education that the mission groups, set up by parts of the sector that felt their interests were not represented adequately by Universities UK, were not helping the situation, and could actually be making it worse.
"The mission groups reflect the divisions that exist and might be exacerbating them," he said. "There needs to be a degree of self-control in the run-up to the next election. Vice-chancellors have to be more politically astute. We need to present a united front."
The sector was split in its response to the Government's offer of an extra 10,000 unfunded student places this summer.
The Russell Group and the 1994 Group of research-intensive universities argued that accepting the places would send the wrong message about the sector's ability to teach students for less, whereas newer universities were more willing to take on the additional numbers.
Sir Roy Anderson, rector of Imperial College London, has argued that cuts in public funding should not be distributed equally across the sector. He believes that research-intensive universities will do more to help the UK recover from the recession and should receive more protection.
The Government is encouraging competition within the sector and has said that universities will have to compete for more state funding in the future.
Speaking at the fringe meeting on September, David Lammy, the Higher Education Minister, indicated that contestable grants would relate to growth areas of the British economy, such as digital media and the green industry.
Mr Lammy added that "there will need to be diversification in the sector".
He later indicated that he was referring to income streams rather than institutional missions.
Simon Griffiths, lecturer in politics at Goldsmiths, University of London, and senior research fellow at the Social Market Foundation think-tank, which sponsored the fringe meeting, said he expected to see "different models of higher education ownership" in the future.
He pointed to a recent lecture by Nigel Thrift, vice-chancellor of the University of Warwick, in which he argued for more consolidation, foreign takeovers, privatisation and specialisation in the sector, with the aim of increasing diversity.
Dr Griffiths said: "The new economy will have diverse needs; we need a diverse sector to meet those needs."