Funding council chiefs have called for the swift introduction of a quality "kite-marking" system for universities and colleges involved in the fast-growing multi-billion pound overseas franchising market.
They have told the Dearing inquiry into higher education that they are helpless to act on shoddy standards unless the new quality agency gets a grip on activities abroad. But experts have warned that extending the agency's reach overseas could involve an army of globe-trotting assessors and cost millions of pounds.
John Andrews, chief executive of the Welsh funding councils, wants the agency, which starts work in April, to take responsibility for monitoring the quality of overseas courses and give a seal of approval to institutions which show they are managing programmes properly.
The agency has already indicated it intends to monitor "the totality of each institution's provision". But Geoffrey Alderman, head of the quality assurance unit at Middlesex University, commented: "This will almost certainly run into the millions."
Professor Andrews made his plea following disclosure of "disturbing" details on the management of overseas franchising and partnership arrangements by the former heads of Swansea Institute of Higher Education.
He told the House of Commons public accounts committee on Monday that the Welsh funding council had been "helpless" to act on clear indications that there were serious flaws in the institute's handling of its overseas business because it was not responsible for funding courses abroad.
A national system was needed to prevent a recurrence of this type of situation and protect the reputation of British higher education.
Professor Andrews said: "We can at least introduce some form of kite marking that the quality assurance agency could offer. I think if you introduce that system you would drive out the bad."
The MPs were considering a report from the National Audit Office and the Welsh funding councils which showed that Swansea Institute governors and officers made 91 trips abroad at a total cost of Pounds 125,000 in four years. This included 18 visits to Kenya by the former principal, Gerald Stockdale, at a cost of nearly Pounds 25,000, to bring in an income of Pounds 28,619.
The committee was told it may soon be asked to consider reports on the overseas activities of Southampton Institute, which is under intense scrutiny by the Higher Education Funding Council for England, the National Audit Office, and Nottingham Trent University which validates its degrees. Nottingham Trent has given the institute until May to address concerns raised about its overseas arrangements in Alicante, Spain.
David Leyland, the institute's director, recently led a delegation to HEFCE in an effort to clarify the reasons behind an extended and continuing audit by funding council quality watchdogs.