Peers are set to launch a cross-party revolt over Government plans to inject "market"-style competition into the higher education sector.
Tory peers are likely to join Labour and the Liberal Democrats in the House of Lords to try and scupper ministers' plans to make it easier for new institutions to award degrees - as long as they meet certain standards, a Labour source confirmed.
Education Secretary Justine Greening has said current system of new higher education providers requiring the backing of an existing university before they are given the ability to award degrees is ''highly restricted'' and must change.
But senior Conservative peer and Oxford University chancellor Lord Patten described the reforms as "hamfisted".
Peers are set to force votes on amendments to the Higher Education and Research Bill, demanding that universities remain "autonomous" bodies, that they must remain free to criticise the Government and that they are barred from seeking profit.
The issue will come to a head on Monday January 9 during the committee stage of the Bill in the Lords, an unusual period during the passage of legislation for peers to force votes.
Lord Patten told The Observer: "To give the impression that one goal is to inject a shot of entrepreneurial vim, so that universities can replicate the energy and outlook of - who shall we say, (former BHS owner) Philip Green - seems unlikely to convince those who work in and study at our universities that ministers understand and care much about what they are doing."
Labour's shadow higher education minister Lord Stevenson said: "This Bill is an attempt from the Government to run a market experiment through the bloodstream of our university system, and a classic case of understanding the cost of everything and the value of nothing.
"There is far more to higher education than financial transactions and bottom lines, including the ongoing contribution made to society and business through the application of new knowledge and expertise.
"Our amendment calls on ministers to recognise all of this and enshrine in law the principles of academic freedom and freedom of speech, alongside protecting the sector's ability to act as society's conscience."
In July, Ms Greening told the Commons that the creation of new universities would be an "undoubted force for good both academically and economically".
''Recent research by the London School of Economics shows that doubling the number of universities per capita could mean a 4% rise in future GDP per capita," she said.
''But the current system for creating universities can feel highly restricted, with new providers requiring the backing of an incumbent institution to become eligible to award its own degrees.
''This Bill levels that playing field by laying the foundations for a new system where it will be clearer, simpler and quicker to establish high quality new providers.''
Ms Greening also sought to ease concerns that the plans could lead to a drop in teaching quality.
''Quality will be built in at every stage, from the way that we regulate new entrants to how we deal with poor quality providers already in the system,'' she said.