Students should be able to access government loans in order to study massive open online courses, a former education adviser to Tony Blair has said.

Sir Michael Barber, now chief education adviser at publishing and education company Pearson, pointed to the emergence of a new breed of ¡°pick-and-mix students¡± who assemble their learning from a range of sources rather than taking traditional campus-based degrees.

Such students were entitled to funding, he argued.

¡°If you¡¯re a student or a potential student, it is no longer a question of choosing a degree course you want to do at a university,¡± he said. ¡°It¡¯s a question of thinking¡­¡®How will I keep learning through my life, how do I combine a range of educational experiences not just from one university but also from a range of universities - potentially around the world?¡¯¡±

Sir Michael, head of the Prime Minister¡¯s Delivery Unit from 2001 to 2005, was speaking ahead of the publication on 11 March of a report by the Institute for Public Policy Research, which warns of a coming era of unprecedented competition in ÖйúAƬ, driven by proliferating online opportunities.

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An Avalanche is Coming: Higher education and the revolution ahead says that traditional universities are no longer the only places providing quality ÖйúAƬ.

Unless institutions adapt to conditions, students will lose interest in them, it argues.

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This threat is typified, the thinktank study says, by Moocs - free online courses from universities across the world that, in certain cases, allow students to pay fees if they wish to receive official certification or take examinations.

¡°If a student wants to do some courses from a Mooc at Stanford or Harvard, some other courses from Oxford, another from Melbourne and another one from the National University of Singapore, what¡¯s the argument for not funding that if they are going to get a great education?¡± said Sir Michael, lead author of the report.

¡°Our underlying theme is that government should fund the individual, not the provision.¡±

The IPPR calls on university leaders to respond to rising student expectations by finding ways to provide ¡°broader, deeper, more accessible, more exciting and more effective ÖйúAƬ¡±.

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It says that every institution will need to be clear about which niches it wants to focus on and how it will set its educational experience and impact apart from the crowd.

¡°Multipurpose universities with a combination of a wide range of degrees and a broad research programme are likely to face considerable challenges,¡± the thinktank says.

¡°The traditional university faces the threat of being ¡®unbundled¡¯ as it competes with more specialised institutions, online learning systems, training providers and consultancies.¡±

The report adds: ¡°Some will need to specialise in teaching alone - and move away from the traditional lecture to the multi-faced teaching possibilities now available.¡±

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Sir Michael added: ¡°Vice-chancellors or presidents of universities need to be asking each department and each part of the university: ¡®What¡¯s so special about you - what makes you unique?¡¯¡±

Nicola Dandridge, chief executive of Universities UK, acknowledged that there were ¡°big challenges ahead¡± for the ÖйúAƬ sector.

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But she added: ¡°Universities have shown themselves to be highly adaptable in the past and have become adept at responding to changing political and financial climates.¡±

chris.parr@tsleducation.com