Chris Patten has criticised attempts to increase the proportion of state school students at leading universities.
Mr Patten says universities are 'bastions of freedom'
Mr Patten, chancellor of Oxford and Newcastle universities, said setting "benchmarks" amounted to "social engineering" and undermined standards.
He told BBC Radio 4's Today programme that higher education was being forced to make up for "inadequacies" in some state schools.
But Higher Education Minister Kim Howells said benchmarks were not the same as "quotas".
'No red or yellow cards'
In a speech to the Universities UK Fair Admissions conference, he added: "No university in the country gets penalised or loses any money because they do not reach their access benchmark.
"There is no yellow card or red card and there are no sticks being raised.
"The benchmarks are simply a set of informative tools which help each university to plan ahead."
However, Mr Patten said admissions tutors were "being pressed to take the sort of proportions of students that the government wants, rather than the students they want to take".
Mr Patten, a former Conservative Party chairman and governor of Hong Kong, said: "Of course they should take youngsters with a lot of potential.
"Both the universities I know best, Newcastle and Oxford, make huge efforts to actually reach out to schools which don't usually send pupils to them.
"But if you want to raise quality, if you want to give everybody an opportunity to develop as far as they can, you don't do it by lowering the standards of universities."
The government has set "benchmarks" for state school intake at UK universities.
According to the latest figures - for autumn 2002 - Oxford is missing its by the widest margin. It took 55.2% of students from state schools, having been set a benchmark of 77.2%.
'Spurious and specious'
Next on the list were Cambridge (57.6%, as opposed to 76.8%) and University College London (61.4% to 80.1%).
However, more than two-thirds of the 165 institutions listed by the Higher Education Statistics Agency exceeded their benchmarks.
Some universities have complained that the benchmarks they were set for this year were raised unfairly to unrealistic levels.
Mr Patten, who was elected Oxford chancellor last year, said: "One of the important things about independent institutions is that they should be able to determine their own admissions.
"It doesn't help anybody if you lower the standards of your admission in order to meet specious targets set by a central government agency."
The government was obliging universities to select not on "intelligence and ability and ability to deal with an examination course, but on spurious postcode statistics, where they come from, whether they meet certain social criteria".
There was a danger of government pressure pushing some universities "in the direction of arguing for going private".