Lord Dearing has warned that the government must ease funding pressure on higher education to allow time to develop ideas on how to maintain quality while reducing costs.
Giving the Alexander Stone lecture at Strathclyde University, Lord Dearing said France and Germany had suffered overcrowding, lack of student guidance, and high drop-out and failure rates as a result of expanded participation without adequate resources.
But he urged higher education institutions to reduce their dependence on government by fostering partnerships with employers on the lines of the lifelong learning initiative.
Universities and colleges were still in the early stages of developing communications technology to support mature learners at home and at work, and they could learn from the Open University, which was "pre-eminent" in distance learning.
"Perhaps the enterprising institution will be engaged in partnerships with the OU," he said.