Alasdair Morrison, deputy minister with responsibility for the Highlands and Islands, made it clear the partnership of 13 further education colleges and research institutes would have to meet "exacting standards" before it became a full university.
The debate was initiated by George Lyon, Liberal Democrat member for Argyll, following claims of mismanagement and intimidation against Professor Brian Duffield, the project's chief executive, which have led to staff complaints and resignations.
The allegations will be investigated independently by Kenneth Graham, formerly head of the local government division in the Scottish Office. Mr Graham will report to Sir Fraser Morrison, the UHI chairman, and Donnie Munro, the rector.
The TES Scotland understands that three complaints have been formally lodged, although Mr Graham has been asked to focus on the procedure used to handle them rather than their substance.
Mr Morrison said he had "absolute confidence" in that inquiry, but he was careful not to be drawn into commenting on the allegations. He concentrated his remarks on clearing up the "fog of misunderstanding" about the future of the project.
Mr Lyon said that "all is not well with the project" but he was not trying to damage it, simply to clear the air. MSPs from all parties reaffirmed their support for the venture, which Mr Morrison also endorsed on behalf of the Scottish Executive.
John Farquhar Munro, Liberal Democrat member for Ross, Skye and Inverness, said the UHI team faced "a monumental task" in co-ordinating institutions from Shetland to Campbeltown. Jamie McGrigor, Tory regional MSP for the Highlands and Islands, suggested disagreement was inevitable when 13 principals were involved.
But Jamie Stone, Liberal Democrat member for Caithness, Sutherland and Easter Ross, said that th situation was "not nearly half so bad as some people make out".
Mr Morrison did admit that ministers had hoped to reach a decision on HE designation by the end of last year. But he said it was more important to reach a correct decision than a quick one. The remaining issues were not "insuperable obstacles" to the achievement of designated status but were important none the less.
Ministers want reassurances on service level agreements between UHI and its academic partners which will actually teach the courses. There are also constitutional issues to be resolved on the precise roles and responsibilities of UHI and its partners which must be "absolutely clear and transparent", Mr Morrison said. This is essentially a "who delivers what" dispute.
Henry McLeish, Minister for Enterprise and Lifelong Learning, met Sir Fraser Morrison on June 9 and received "a very encouraging report", according to Mr Morrison. The two ministers will meet the UHI board in the autumn, after which Mr Morrison pledged he would report to Highlands and Islands MSPs.
Mr Morrison made it clear the first decision to be taken was purely on whether the UHI project should be designated as a higher education institution, which is essential to unlock support from the Scottish Higher Education Funding Council. This does not confer university title although it is an important first step.
"There are exacting requirements that all UK institutions aspiring to university status have to meet - exacting but achievable. That is the public's guarantee that universities have a proven track record of quality and that they are large enough, and diverse enough, to have earned the title.
"How long it will take UHI to get there is up to UHI. That, surprisingly, is not well understood."
Following HE designation, the next step is the granting of degree-awarding powers and thereafter the university title. The criteria for becoming a university include having 3,000 full-time students, a research capacity and a track record in teaching and research.