Fears were raised today that universities are blocking colleges from offering more higher education places at a cheaper cost.
Under Government reforms, from next year, institutions, including universities and further education (FE) colleges, will be able to bid for a share of 20,000 student places made available to those that keep their fees below low.
Many FE colleges now offer degree courses - there are around 171,000 higher education students studying at these institutions, according to the Association of Colleges (AoC).
These courses are often offered in partnership with universities, for example with the university validating the degree.
But Business Secretary Vince Cable today raised concerns that universities may attempt to claw these places back for themselves.
This would be a "backward step", he warned.
He told the AoC annual conference in Birmingham: "I do get reports that some FE colleges' attempts to offer their own higher education (HE) courses are being discouraged, if not outright blocked, by their university partners.
"College principals have expressed fears that some universities may revise their validation charges and franchising arrangements.
"It would be a backward step if FE colleges were squeezed out of the market by universities clawing back franchised places.
"FE colleges have a major role to play in offering students greater choice. Anti-competitive behaviour is obviously unacceptable.
"If FE colleges can offer good quality degrees at a more competitive price than a validating university does on its own campus then I'm all in favour of it."
Mr Cable said he had made this point to university vice-chancellors and the Higher Education Funding Council for England (HEFCE) would be "looking carefully at any restrictive practices".
He asked college principals to report any cases that had affected them.
Mr Cable later refused to name any colleges or universities, but said he had had MPs reporting cases to him.
Plans to allow English institutions charging £7,500 or less to bid for a share of 20,000 funded student places - known as "core and margin places" were announced in a White Paper published this summer.
The move was widely seen as an attempt by ministers to keep tuition fees low after it began to emerge that many universities would charge at, or close to, the maximum £9,000 from 2012.