Questions have been raised over whether the Higher Education Funding Council for England will deal with private institutions in a "fair manner" if it is given new powers to oversee them.

Carl Lygo, principal of the for-profit BPP University College, said he had worries about the proposals in the White Paper to make Hefce the lead regulator for the sector, given that it had "clearly signalled" its views on commercial operators.

Earlier this year, Hefce published a report detailing advice it had given to the government, in which it warned that the goals of private providers "may not match the national interest" and that they could harm publicly funded universities by cherry-picking profitable courses.

Mr Lygo said he would be interested to see what Hefce's position was now on for-profits choosing more lucrative courses, given that there was no indication of disapproval of this in the White Paper.

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"Hefce has clearly signalled that it is no friend of the private sector. I am concerned, if it is going to be regulating the private sector, that it does so in a fair manner," he added.

Under the government's proposals, Hefce would remain as the "primary regulator" for the sector in England but would have powers over any institution that accesses student loans rather than merely those to which it gives public grants.

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Mr Lygo said he would welcome the new regulatory framework if it was designed to ensure quality but said the private sector would be "put off" by red tape and restrictions on student numbers.

Martin Day, vice-principal at the ifs School of Finance, another private provider with degree-awarding powers, said he would be "very happy" for ifs to be fully recognised in any new higher education framework.

The not-for-profit institution is already part of the student complaints scheme and is inspected by the Quality Assurance Agency, and Mr Day has just joined a Hefce committee advising on teaching quality and the student experience.

But he said further information was required about exactly how institutions such as ifs - which announced this week that it would be offering three undergraduate degree courses in 2012-13 with fees of ?6,000 or less - would fit into the student number control system.

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Meanwhile, Mr Lygo welcomed proposals in the White Paper to introduce a sanction where degree-awarding powers, for taught and research degrees, could be removed if "quality or academic standards fail".

However, Roger Brown, professor of higher education policy at Liverpool Hope University, said he was not sure that the government would be able to introduce such a sanction for existing universities, whose degree-awarding powers were protected in law.

"Those powers cannot be retrospective," he said, although he added that such sanctions would be a powerful weapon against poor quality.

He also said suggestions in the White Paper that institutions could gain degree-awarding powers with less of a track record were "awful", and he attacked any plan to give them to organisations without an academic community.

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simon.baker@tsleducation.com.