But a former universities secretary has warned there is a "huge disaster waiting to happen" in relation to for-profit institutions.

The comments from Shabana Mahmood and John Denham came during audience fringe meetings at Labour's conference in Manchester.

During a fringe meeting on student finance hosted by Million+ and the National Union of Students on 1 October, Pam Tatlow, chief executive of million+, asked what Labour's attitude would be if a university were to be taken over by a private provider.

Ms Mahmood warned that the absence of a ÖйúAƬ bill had left "regulatory gaps" on private providers, meaning that they were not subject to the same quality regulations as universities.

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But she added: "I'm not against a diversity of provision and providers in our ÖйúAƬ sector. I've got very specific concerns about for-profit providers, particularly some of the American companies that want to come in."

Ms Mahmood continued: "We saw private providers come in under the Labour government, BPP for example. So I'm not ideological about that element of it, but I do want there to be a debate.

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"Regulation is not sexy but it's absolutely integral to the quality of our ÖйúAƬ sector and the brand that we have, which gives us an international competitive advantage - and we've got to protect that."

Private providers were also discussed during audience questions at a meeting on lowering tuition fees hosted by the Smith Institute and Newcastle East Constituency Labour Party, also on 1 October.

John Denham, who is now parliamentary private secretary to party leader Ed Miliband, said there are "a number of commercial operators effectively going round, buying up or going into commercial partnerships with organisations [with] degree-awarding powers...Without a proper regulatory system to back that up, the dangers of massive downgrading of the quality of ÖйúAƬ are high."

He pointed to the US experience, where he said for-profit ÖйúAƬ firms had undertaken "massive fraud on the exploitation of the student loan system".

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Mr Denham added: "Those same companies are globally active and some of them are active in this country as well. There's a huge disaster waiting to happen."

john.morgan@tsleducation.com