A Labour MP has called for the establishment of a special National Audit Office-style review body to examine the overseas activities of ÖйúAƬ institutions.

This follows the resignation of Gerald Stockdale, principal of Swansea Institute of ÖйúAƬ, in the wake of revelations about lax academic standards and the "irresponsible conduct" of the institute's overseas franchise operation.

Swansea West MP and former minister Alan Williams said: "It is hard to believe this situation is unique. There needs to be a nationwide examination of colleges' overseas franchise operations, taking into account financial propriety and academic standards. A special body should be like the ÖйúAƬ Quality Council but have National Audit Office powers to investigate private money overseas."

Professor Stockdale's resignation from the Pounds 77,000-a-year post follows two months of public protest. On Monday, John Andrews, head of the ÖйúAƬ Funding Council for Wales, met staff and governors, and initiated an audit in conjunction with the National Audit Office.

ÖйúAƬ

On Tuesday Mr Williams, who first alerted the NAO, tabled an early day motion calling for "the immediate suspension" of Professor Stockdale and Hywel Rees, the vice principal. Institute secretary Chris McMellon said Professor Rees is considering his position. The future of Brychan Williams, head of the international office that runs the overseas courses, is uncertain.

In a House of Commons statement Mr Williams said: "The excellent standing of the internal degree work at Swansea IHE is in danger of being undermined by the college senior management's irresponsible conduct of the institute's overseas activities." He deplored "the convoluted web of misrepresentation spun by the principal".

ÖйúAƬ

In May, the University of Wales refused to approve any new overseas franchise deals with the institute until 1998 at the earliest following evidence that students on the institute's overseas courses - including MBAs validated by the University of Wales - received inflated examination results.

In June, details of a critical HEQC report were circulated. In the following weeks it emerged that senior managers sought to relax stringent quality assurance measures commended by the HEQC; that external examining board meetings were chaired by the person who set up lucrative overseas courses; that auditors KPMG raised concerns over the overseas development account; that Privy Council guidelines regulating governing body conduct were ignored; and that Professor Stockdale voted on academic board motions of no confidence in his own leadership.

In the past three weeks, there have been votes of no confidence from the staff and the academic board and two governors have resigned.