Ministers have re-issued an appeal for university vice-chancellors to help battle the "serious" threat of violent extremism on some campuses.
Mr Rammell said al-Qaeda inspired terrorism was a big threat
Academics are being urged, in revised guidance on the issue, to create space for rigorous and challenging debate.
Lecturers claimed guidance issued in 2006 asked them to spy on students and risked demonising Muslims.
The threat from university campuses was "serious but not widespread", Higher Education Minister Bill Rammell said.
But he told reporters that al-Qaeda-influenced terrorism was the biggest threat facing the country, and the biggest challenge for the government.
He said he did not want to "overstate the menace" of violent extremism, but it was a "real and serious threat".
"The director-general of the security services said there were about 200 groups encompassing 2,000 people engaged in promoting and organising terrorist activity," Mr Rammell said.
Although these groups were to be found not just in the higher education sector, there would be examples there, he warned.
The revised guidance said there was "no single profile" of potential recruits.
"But they are likely to be young - generally younger than 30 - and male, although the number of women who support and participate in violent extremism is increasing," the guidance said.
It was inevitable, as efforts were made to root out extremists, that some would go underground, he added.
The new guidance aims to "foster cohesion" among students and reflects the backlash from university tutors over earlier guidance they feared would encourage Islamaphobia.
It was also written in the light of increased knowledge of how violent extremist groups operated, the minister said.
The guidance said student societies that fell into the hands of extremist individuals could play a significant role in fostering radicalism on campus.
It points out students who are new to a university and looking to make friends may be vulnerable to grooming by radicals.
And charismatic radical speakers who took control of events such as Friday prayers could be the means by which extreme groups sought to spread their message, it added.
A spokesman for the Federation of Student Islamic Societies in the UK and Ireland, Faisal Hanjra, said: "Calls for academic and vigorous debate on university campuses are certainly positive steps forward in tackling extremist and radical ideas."
He added: "We would, though, strongly urge universities and colleges to view the extremist threat in its correct context.
"There is no evidence to suggest that Muslim students at university are particularly vulnerable to radicalisation, nor is there any evidence to suggest that university campuses are hotbeds of extremist activity."
Under the guidance:
- Universities should have a clearly publicised code of practice on freedom of speech and regular dialogue with student groups.
- They are urged to break down segregation between student communities and ensure they are free from bullying and harassment.
- Channels through which students can make any concerns about extremism known should be set up and publicised.
- Staff should be trained and students clearly pointed to sources of help within the university, student union and local police.
- Universities should also establish clear policies on external speakers - ensuring they did not promote or advocate violent extremism - and share information about them.
National Union of Students president Gemma Tumelty welcomed the new guidelines but said the section on free speech was unhelpful and contradictory.
She added: "Lecturers and students both have an interest in combating terrorism but we have concerns that encouraging lecturers to monitor groups of students could polarise their relationship."
Sally Hunt, general secretary of the University and College Union, said her members took the threat of terrorism seriously.
But she warned: "Staff are not trained to, and should not be expected to, police their students.
"For community cohesion to truly work, universities must remain safe environments for all staff and students to work and live.
"No student should ever think they are being spied on and no staff member should ever be pressurised into treating any group of students differently from another."
Diana Warwick, chief executive of Universities UK, said: "Universities are doing a great deal of work with their students, staff and communities to ensure they are places where the values of respect, tolerance and freedom of debate are upheld."