She takes her seat in the Lords today, as Baroness Warwick of Undercliffe (the part of Bradford where she grew up and went to grammar school).
According to Dr Peter Knight, the Vice-chancellor of the University of Central England and the most outspoken university boss in Britain, the furore is the biggest rupture in the history of the vice-chancellors' organisation.
It is also one of the few occasions in which the university bosses have become worked up on an issue of principle. "Vice-chancellor e-mail chatlines have been steaming," he says. He and Professor Graham Zellick, the new Vice-chancellor of London University, are openly calling on Baroness Warwick to resign on the grounds that the two jobs are incompatible.
Professor Zellick, a combative lawyer who seems to enjoy a good argument, has gone one step further. He has given notice that he will resign in protest from the CVCP in a year's time. And he has done so in a thoroughly modern fashion - by issuing a press release.
"My argument is that the committee has to be in all respects completely outside party politics," he says. "We're a registered charity. We have to represent a huge higher education sector where everybody has different political views. We have to deal with governments of all complexions.
"It's not appropriate to have a chief executive who is - on a daily basis - actively involved in national party politics."
Some insiders feel that Baroness Warwick should have learnt from the lesson of Greg Dyke, the new director general of the BBC. When Mr Dyke was appointed, he resigned from the Labour Party. Baroness Warwick should make a similar choice, they believe.
One of the universities' main concerns is funding. A committee chaired by Sir Michael Bett has recently recommended that the Government injects an extra pounds 380m a year into the system to iron out inequalities and reward the underpaid. The CVCP is expected to argue strongly for the Government to cough up.
But the Government's response has been that it is not responsible for university pay and conditions. How is Diana Warwick to handle that as a Government-appointed representative in Parliament? And how can the vice- chancellors believe she will press the Government hard?
When Baroness Warwick was sounded out for a peerage she asked the outgoing CVCP chairman, Professor Martin Harris, the Vice-chancellor of Manchester University, whether she would be able to continue in her present job. As he was nearing the end of his chairmanship, he consulted the new chairman, Professor Howard Newby, the Vice-chancellor of Southampton University. But he couldn't talk to anyone else because the subject was so sensitive. The opinion of these two men was that, yes, she could perform both roles. So, when she was formally offered the peerage, she accepted.
Then the complaints began to roll in. On 2 July, Professor Harris was forced to call a meeting of the CVCP's council, the elected governing body, attended by about 15 vice-chancellors. "They overwhelmingly backed my decision," he says. "We have a fully representative council of about one-fifth of our membership. Only one member of council (Dr Knight) dissented. It's not true that even a substantial minority, want Diana removed from office."
After that meeting the university bosses issued a statement saying that Baroness Warwick would continue to defend the interests of the CVCP at all times. Although she had chosen to take the Labour whip, the statement continued, it was accepted in the Lords that peers can hold their own views independent of party lines. In other words, when it came to the crunch, Baroness Warwick would be a cheerleader for the universities - rather than the Government - and would put her university allegiance first. The statement also said she would be reorganising her workload. She has always had heavy commitments on top of her CVCP job - something which raised eyebrows.
Baroness Warwick would be giving up her membership of the Employment Appeals Tribunal and be standing down from the Neill Committee in October. The latter was essential. Her membership of the Standing Committee on Standards in Public Life had been regarded as a delicious irony by her critics. In addition, all actions of the chief executive, including the allocation of time, are subject to robust checks and balances, the statement said.
Professor Newby, the new chairman, would report to council on how Baroness Warwick was managing her ambiguous role before the end of the year. The message was clear: the university bosses were going to tough it out. But that statement resulted in Zellick's decision to resign, making public a blistering letter, in which he said that a significant minority of vice-chancellors no longer had confidence in the chief executive's ability to do her job.
He added: "I think there may also be a problem - given that CVCP is a registered charity - with continuing to pay a full salary to the chief executive.
"Unless there is some adjustment to her salary, I feel there is a matter to be referred to the Charity Commissioners. It cannot be right that public funds from universities should be deployed to this end," he said.
The battle lines have been drawn. The CVCP rejects Zellick's argument about charitable status. It says there's no problem with a politician being on the pay roll of a charity, and that many other organisations - including universities - have politicians on their payrolls. It will, therefore, not be docking her pay which it describes as being between pounds 80,000 to pounds 100,000 a year, including her pension costs.
Some vice-chancellors believe Zellick has gone over the top in his criticism, and that Baroness Warwick should now be left to resign in her own good time. Others have sympathy with him. Zellick says he has received letters from more than 11 vice-chancellors supporting his stance, and that the majority are unhappy with the decision.
"I think it creates a very difficult situation," says Dr Michael Goldstein, Vice-chancellor of Coventry University. "It's difficult to see that there won't come a time when there will be a problem. This isn't in any way to question Diana Warwick's integrity. But she may find herself in an impossible situation.
"I accept that she says she will put the universities first, but in the real world it will be difficult at times to maintain that position, particularly in the long run."
Professor Maxwell Irvine, Vice-chancellor of Birmingham University, is also uncomfortable. Baroness Warwick will be presented with conflicts of interest, he believes. In addition, she will be expected to put in the hours as a working peer. "It's very difficult," he says. "Council obviously feels that there is a way of working around this. The incoming chairman will be keeping it under review. Clearly a lot of people feel uncomfortable with it."
Other vice-chancellors would speak only off the record. One said there should be a meeting of the full committee to discuss the matter because the council had made a decision which was not shared by the majority.
Another said the decision was "monstrous", and pointed up the political naivete of university bosses.
Others were happy to go on the record as supporting her. According to Ivor Crewe, Essex's Vice-chancellor: "Diana Warwick has been an excellent chief executive, and I would very much wish her to continue. I see no reason why the CVCP should not make internal arrangements to ensure that she's not subject to any conflict of interest."
Peter Scott, Vice-chancellor of Kingston University, and Tim O'Shea, Master of Birkbeck College, London, think that the CVCP has more important things to worry about.
Many are hoping Baroness Warwick has already made an appointment with headhunters to find a new job and will go quietly before the year's end. Otherwise they believe the vice-chancellors' committee will become less effective than it is already.
FROM YORKSHIRE TO WESTMINSTER
AGED 54 tomorrow, Diana Warwick is hardly one of "Tony's Babes". But her New Labour allegiance has been an open secret at the Committee of Vice Chancellors and Principals ever since she was appointed in 1995.
An articulate and glamorous figure, she has dragged the committee into the modern world, restructuring its internal administration and setting an agenda which emphasised widening participation, checks on quality and close relations with the world of work.
All three are subjects dear to the Government's heart. Her great strength is her presentational skills. She is a superb lobbyist, good at mastering a brief and explaining it simply.
Born in Bradford, Yorkshire, and educated at Bedford College, London, she quickly carved out a successful career in the trade unions, starting out as assistant to the general secretary of the National Union of Teachers, and becoming assistant secretary of the Civil and Public Services Association in 1972.
Later she became general secretary of the Association of University Teachers. To succeed as a woman in the male-dominated trade union world - albeit in white collar unions - was no mean achievement. It was a testament to her style and ambition.
In 1992 she left trade unions to become chief executive of the Westminster Foundation for Democracy. Her career in the Lords is expected to take off like that of her friend, Baroness Symons, who is Foreign Office minister.Reuse content