The University of Toronto has become the first member of the global consortium Universitas 21 to quit the group after expressing concern over plans to set up an online university selling postgraduate courses.
Toronto was a founder member of U21 in 1997. The consortium includes 18 research-intensive universities in ten countries.
Last November, Toronto president Robert Birgeneau told the consortium chairman, Alan Gilbert, that his university would not join the online venture.
In an email to senior faculty late last month, Professor Birgeneau said Toronto needed to protect the use of its name as, under the terms establishing the e-university, U21 would be able to use the logos of members in issuing its own certificates and degrees.
"With advice from legal counsel on our options with respect to remaining a member of the U21 network without participating in the e-learning venture, we are now proceeding to withdraw from U21 altogether," he said.
Sheldon Levy, who chaired Toronto's e-learning committee, said the timetable U21 set to establish its private e-learning venture proved impractical and the university was not prepared to join when "101 questions" needed to be asked.
The university had to quit from all U21 activities because it discovered it would not be able to cherry-pick from the programmes offered to members.
Professor Birgeneau has since written to Professor Gilbert, vice-chancellor of the University of Melbourne, and to other member universities informing them of the decision. But he said: "We will be simultaneously working to strengthen our bilateral linkages with all U21 member universities."
When Professor Gilbert announced plans to establish the network, he said one of its goals was to enhance international research collaboration.
Last year, he initiated the project to set up an online university. He said the venture could generate tens of millions of dollars in revenue for participating universities.
He negotiated a joint venture with a subsidiary of News Corporation, owner of The THES , but this was unsuccessful.
The consortium subsequently signed a memorandum of understanding with the US company Thomson Learning. Under the agreement, the company would be responsible for online course design, content development and testing and assessment.
It appears Toronto became concerned about the financial implications of the venture. Establishment costs have been put as high as $100 million (£69.5 million) with U21 members and Thomson Learning putting in half each.