The Government has prepared the way for the creation of a new breed of private universities.
Multinational companies, such as Unilever and BAE Systems, which already have unofficial universities to train their staff, will be able to apply for time-limited degree-awarding powers and full university status under revamped criteria announced last week by Alan Johnson, the Higher Education Minister.
The more relaxed rules will also allow public services outside the higher education sector, such as the police, armed forces or the Civil Service, to set up their own universities.
From September it will be easier for non-traditional organisations to apply for taught degree-awarding powers, and the requirement that universities must have students in at least five subject areas and the power to award research degrees will be removed.
But the changes will also establish two categories of university - those in the publicly funded higher education sector that retain degree-awarding powers and title indefinitely, and those outside the sector that will have to undergo an audit to renew their status every six years.
Mr Johnson said the two-tier system and the continued requirement that universities have at least 4,000 full-time equivalent students would act as safeguards for quality and standards.
He said: "Quality and standards will remain the overriding factor in gaining degree-awarding powers and university title. Strict criteria will apply, and to retain their powers organisations outside the publicly funded sector will have to prove that they are maintaining degree-awarding powers standards through a regular audit by the Quality Assurance Agency."
Patricia Ambrose, chief executive of the Standing Conference of Principals, said: "We hear rumours that certain multi-national companies might be interested in creating a university, but the criteria will still be quite demanding for them. I suspect that the number applying will be no more than a trickle in the beginning."
Richard Haymer, education and partnerships director of BAE Systems, which has a virtual university, said his company might consider going for degree-awarding powers. "It is something we will want to consider," he said.
- Further education colleges should be allowed to award their own foundation degrees with the aid of an old-style national service for validating degrees, a conference heard last week.
David Melville, vice-chancellor of Kent University and a member of the Government-appointed foundation degree task force, said such a move was needed to help foundation degrees fit in with other vocational courses offered by colleges.
He told delegates at the first conference of Foundation Degree Forward, the body set up to promote foundation degrees and provide a national network of validating universities for the qualification, that progression routes through vocational education would be strengthened as a result.
But he admitted there would need to be a change in legislation.
Professor Melville, who is also chairman of the Universities Vocational Awards Council, told The Times Higher he thought that Uvac, rather than FDF, would be the best organisation to provide the validating service.