Chris Patten, who became Oxford University's 294th chancellor this week, attacked the government's "vulgar" political interference in university access as a crude attempt at social engineering.
Mr Patten, who was installed on Wednesday, said the government risked damaging universities by politicising university access in its drive to increase the proportion of poor people in higher education.
Mr Patten said: "I feel strongly about access to higher education and intend to devote time and energy to this issue.
"But it is insulting to the able, and damaging to the universities that seek to educate them, to make the issue of access a crowbar for social engineers rather than a challenge for educationists, and it is downright vulgar to allow it to become a populist political slogan."
Mr Patten, the European commissioner for external relations, said universities had to balance their roles as custodians of tradition and drivers of change.
"So how will this great collegiate university retain the sense of community implicit in the college system while arming itself to compete with the finest campuses of the US? How do we match America's educational weapons of mass attraction?" he asked.
He said one of the problems was that UK universities had suffered from serious underfunding. He said that if governments were serious about having universities as great national assets, they had to pay.
Mr Patten said: "All our universities have suffered from two decades of public parsimony. The issue has been ducked for the past 20 years."
Signalling his support for tuition fees, Mr Patten said: "If the government is not able to provide adequate funding for higher education, universities must be able to look for other options."
The former Conservative Party chairman's views contrast with his party's proposals to scrap fees and halt the expansion of student numbers.
Mr Patten welcomed the appointment of John Hood, vice-chancellor of Auckland University, as vice-chancellor of Oxford, subject to approval from congregation. He said: "Dr Hood combines experience of higher education and industry. I met him recently in New Zealand and found him an exceptionally able, nice and amusing man."