Highlands and Islands Enterprise is threatening to use its financial clout to force through fundamental changes to the structure and administration of the area's fledgling university.
It wants the 15 colleges and other institutions that make up the University of the Highlands and Islands Millennium Institute to give up some autonomy.
The HIE move follows the announcement by the Quality Assurance Agency for Higher Education that the UHI would not get its university charter and degree-awarding status in 2007, as expected.
Willie Roe, chairman of HIE, said that UHI was hugely important for the future development of the Highlands and Islands, and that it was extremely disappointing that university status would be delayed. "We are trying to build a university out of a dozen independent free-standing FE colleges and around half a dozen independent free-standing research institutes. The balance between decision-making at the centre of the UHIMI and its constituent parts isn't right.
"If the UHI is to flourish, a number of decision-making centres must move to the middle of UHIMI. That means each institution giving up some decision-making and autonomy to get the benefits of being a bigger collegiate international institution."
Mr Roe, who is close to ministers, claims the way decision-making powers are shared at the moment would not allow the UHI to make decisions fast enough.
He indicated that Highlands and Islands Enterprise would use its grant-aid powers to bring some pressure to bear on the individual institutions within the University of the Highlands and Islands Millennium Institute to begin amending their structures with some alacrity. "HIE is a big investor in UHIMI and we have a big interest in it," he said.
Sandy Cumming, HIE chief executive, said they would now work with UHIMI to learn the lessons from the Quality Assurance Agency's assessment and begin to implement an action plan. It would aim to rectify weaknesses by 2008.