Delegates unanimously called for an investigation into the new university's funding when further education budgets are being slashed and lecturers sacked.
Bob Hepburn, Inverness College, supporting a leadership motion, accepted the UHI was going to go ahead but told delegates: "We just do not see where the educational worth of it is when the Open University has pretty well mopped up the Highlands."
Mr Hepburn said it was less like an educational initiative and more of a business opportunity. The project already had #163;33 million from the Millennium Fund for start-up costs in addition to #163;5.5m, or 3 per cent, "lopped off" FE budgets this year.
"It's impossible to get rid of the feeling that we are on a site at Inverness College that is being cleared for a new structure," he stated. The college is looking for around 50 redundancies among lecturers and support staff.
Joe Eyre, CLA president and a Langside College lecturer, said it was "remarkable" that the centre for the new university was making staff redundant and that Moray College in Elgin, another satellite base, could not even offer staff a consolidated pay rise this year, was threatening redundancies and attacking conditions of service.
Mr Eyre said Moray College was closing down the motor vehicle courses. "They want to shut down, in effect, all non-advanced work and move on to higher education provision solely," he said. This creates serious tensions under recent Scottish legislation, he said.
"There is a requirement on the Secretary of State to provide an adequate FE service in every part of the country. If we shut down motor vehicle in Elgin, hospitality, and non-advanced secretarial courses, what are young people in that area - a fairly rural area well removed from other colleges and who are not suited to a course of higher education - going to do for their education and training opportunities ?"
Mr Eyre estimated #163;16m in total would be removed from FE budgets to establish the new university. It was "unacceptable" that FE was funding higher education. The university was "an extremely attractive development" but needed to attract additional resources.
The conference in Edinburgh also gave unanimous backing to any dilution of lecturers' jobs through the introduction of a new "associate" grade of lecturer, piloted at Lauder College in Dunfermline.
Delegates were told that around 15 temporary lecturers had been placed on new contracts that increased weekly class contact time by six hours and cut wages. Perth and Clydebank colleges were said to be interested in emulating Lauder.
Graham Watt, of Lauder College, said the union objected strongly to the development and was appealing against it to the college board.
"The danger is that if we do not fight this, every lecturer who leaves the service will be replaced by someone who is given 30 hours' class contact and a salary scale of zero to point 2," he said.
"I'm quite sure every principal in the land would love to staff their college with lecturers who do not go above point 2."
Jim O'Donovan, Central College, warned against "cheap-skate substitutes" and advised: "If we cannot oppose this, we, as a body, are finished. "
The conference also backed a call for a campaign, including a one-day strike, to highlight the lack of funding in FE.
Kate Lonergan, Langside College, said: "We need to make it quite clear we are going to defend education and to campaign in a number of ways to defend members' jobs."