University chiefs are demanding the resignation of a member of their funding body because he called some universities "third rate".
Sir Richard Sykes says his remarks were selectively reported
They say Sir Richard Sykes should apologise and withdraw his comments or be sacked from the board of the group which funds English universities.
Sir Richard, who is the rector of Imperial College, London, said money was being "drained" from institutions like his to "third-rate institutions".
He singled out Luton University, saying "a penny spent here [Imperial] is a hell of a lot better than a penny spent at Luton for the economy".
Now a group which represents the newer universities says Sir Richard's position as a board-member of Hefce, the body which funds England's universities, is untenable.
The vice-chancellor of Middlesex University, Michael Driscoll, is the chairman of the CMU, a group which describes itself as "campaigning for mainstream universities".
He told BBC News Online: "It was quite understandable that people were horrified - universities who are members of CMU and lots of universities which are committed to widening participation.
"Hefce is responsible for the funding of all universities and for one of its members to make an ill-considered and ill-informed attack - it is unacceptable.
"As long as he refuses to withdraw the remarks and apologise, his position is untenable."
The government wants 50% of young people in higher education
Sir Richard's remarks were made in an interview with the Financial Times, in which he described the government's policy of widening participation as one of "bums on seats" and one which would not give the UK the edge over its global competitors.
In a letter to Hefce, which the organisation has released, with Sir Richard's permission, he clarified his position and comments.
He said he was not opposed to a 50% participation target per se, but thout that it needed "appropriate funding mechanisms".
"My unfortunate allusion to mathematics at Luton was intended to illustrate the diversity and differences - in mission, purpose and courses offered - within our higher education system and the way they are funded," he wrote.
"The unreported part of my comment on that issue was 'Universities shouldn't all be treated the same. A few stand on the international stage and need to be funded differently'.
"Certainly, I intended no slight or damage to Luton and I have since made this point both to the vice chancellor, Professor Les Ebdon and to Sir Robin Bingham, chancellor of Luton."
Hefce has received a number of letters from vice-chancellors about Sir Richard's comments.
The funding council maintains that his remarks were made in a personal capacity and not on its behalf or as a member of its board.
"His comments, as reported, do not reflect the position or policies of the council," a statement said.
The chairman of Hefce, David Young, has written back to vice-chancellors who have complained.
He told them the Hefce board "supports growth in student numbers provided it is on a fully funded basis and that is indeed a key theme of our recent advice to government in the current spending review.
"I think that all Hefce's stakeholders should judge our standards of impartiality and fairness by the decisions we take and the statements we make."