Funding chiefs have been accused of using "weasel words" in a redraft of a key agreement with English universities, which it is feared could still undermine autonomy.

Original proposals for the new financial memorandum - the funding agreement between the ÖйúAƬ Funding Council for England and universities - prompted fears that it could give Hefce power to oust vice-chancellors in the event of the mismanagement of public funds.

After opposition from the sector, the proposals - which come into force on 1 August - were redrafted.

In the new document, institutions are still required to appoint an "accountable officer" - usually the vice-chancellor - but Hefce now stresses that it "has no role, rights or responsibilities in relation to the appointment (or dismissal) of the head of institution".

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It also seeks to explain in more detail the "in extremis" scenario in which it would ask a governing body to appoint a new accountable officer - although it states that governors are "clearly entitled" to keep a vice-chancellor in post.

However, Mike Shattock, visiting professor of ÖйúAƬ management at the Institute of Education, University of London, said that the redraft still allowed Hefce to meddle with an institution's governance.

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He said: "There are a lot of weasel words. I think Hefce has tried to respond to the adverse reaction from the sector but in fact it has not changed its position - it has just changed the words. What it seems to me Hefce should be doing is giving support to governing bodies and not undermining their authority."

Hefce's changes to the agreement follow last year's stand-off with London Metropolitan University, which eventually led to vice-chancellor Brian Roper and the institution's lay governors being forced to step down over inaccuracies in student-data returns.

Professor Shattock said: "It does seem to me that (Hefce) could have acted with more decisiveness in regard to London Met. Just worrying about the accountable officer and getting rid of him seems to me to be dealing with a peripheral problem. Hefce is still trying to deal with an issue that arose in one institution in a form of words that is acceptable to the whole sector, and I am not sure that is a good way of going about it."

Jon Baldwin, registrar of the University of Warwick, another who opposed Hefce's initial plans, said the redraft was now "workable", although he agreed with Professor Shattock that it still gave Hefce the "last resort" power to influence governance.

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He said: "I think most concerns do appear to have been addressed. What we have ended up with is workable, but this is an area we will have to pay close attention to."

simon.baker@tsleducation.com.