The Government has promised to introduce an "extended project" by 2008 as part of its radical overhaul of secondary education.
The Qualifications and Curriculum Authority is consulting on the idea this month, before launching a pilot scheme in September.
David Mackay, the QCA's 14-19 programme leader, said universities were concerned that students lacked the ability to learn independently and research a subject properly, rather than merely cutting and pasting from the internet.
"We do not want to restrict the project to just an essay, but extended writing is likely to be important," he said.
"Oral presentations could also be important, along with the wider skills of problem-solving and working with others."
As an example of a group project, Mr Mackay mentioned a puppet show developed by citizenship students at Warwickshire further education college to encourage primary pupils to eat more healthily.
He said the extended project might be worth only half of an AS. Teachers are likely to have a choice about whether it is completed in one year or two.
Jon Hunter, deputy head of St Marylebone Church of England secondary school, in London, said: "I like the concept, but I hope it is not going to be simply bolted on to everything else we do, underfunded and undervalued."
* It could take the form of a dissertation, field study or a performance or the creation of a work of art.
* Group projects are also possible - for example an educational puppet show on healthy eating.
* Written work must feature in some form, and students will be expected to show off their functional skills in literacy and numeracy.
* Distinction, merit or pass are the likely awards.
* The new qualification will either stand alone or be absorbed into the new vocational diploma.
* It is designed to appeal to students of all abilities.