Australian universities will be required to obtain the approval of the federal Minister for Education, Brendan Nelson, before closing any courses.
Dr Nelson warned vice-chancellors that they had generated "growing community concern" by closing specialist courses, especially those of national importance. He said that the Government would have to agree to future closures or universities would face cuts to their government grants.
In a letter to vice-chancellors, the minister acknowledges the difficulties universities face in responding to low or falling student demand in courses such as allied health and some languages. But he says courses relevant to fields with current workforce shortages, or where there is national value, should be maintained.
The Australian Vice-Chancellors' Committee responded by demanding that the Government cover the costs of providing courses that attract low enrolments. An AVCC spokesman said universities reserved the right to axe courses with low demand.
There are growing concerns among academics at increasing government involvement in university decision-making and at Dr Nelson's statement that the education department was developing a set of "strategic principles for higher education priorities".
"The principles will also provide the sector with guidance on how this additional clause in the funding agreement will operate in practice," Dr Nelson says, adding that from 2006, an additional condition in funding agreements will specify that any closure of specialist courses must be negotiated with the Government.
Course closures became controversial last year after the University of Western Sydney decided to suspend its student intake onto its podiatry and osteopathy courses from 2005, and the University of Sydney decided to transfer its nursing programmes to two other universities.
The AVCC defended the rights of universities to close courses where there was insufficient demand and course overheads were high.
The spokesman said institutions had to be free to alter their course mixes and have funding follow the change, otherwise their operations would be frozen.
The National Tertiary Education Union said Dr Nelson was using protection of the public interest to justify interfering in the courses offered by universities. But this applied only to publicly subsidised programmes and not to those where students paid the full cost of tuition fees.
The union said the message to institutions was that if they wished to avoid excessive bureaucratic control by the Government, they should charge full fees for all courses and let the market determine what programmes were on offer.