Welsh further education college heads have called for a greater share of higher education funding and a monopoly on sub-degree courses in Wales.
Universities should not receive funding for Higher National Diploma and Certificate programmes, which should be provided solely in further education, according to college principals.
Welsh funding chiefs should build provision for more higher education courses in colleges into their strategic plans, principals told the Welsh Assembly's higher education review.
Fforwm, the body representing Welsh colleges, said that a growing number of colleges was receiving direct funding for higher education programmes. This is in addition to those involved in offering franchised higher education courses and higher-level national vocational qualifications.
More than 7 per cent of Welsh full-time higher education enrolments are in colleges. And college chiefs say that demand is growing, particularly among young people with financial difficulties who do not want to move away from home.