Universities are told to support the skills needs of the economy
Universities Secretary John Denham has rejected suggestions that he is planning to re-introduce polytechnics for vocational courses in England.
But Mr Denham said universities must become more accessible to students who have taken vocational courses.
He warned that university courses must become more tailored to serving the needs of the national economy.
This would also mean more part-time and short courses, Mr Denham told a higher education conference.
The speech also called for more scrutiny of the availability and value of postgraduate courses to UK students.
And he warned that extra funding might be needed to strengthen universities' quality assurance as much as ambitions for expansion.
Looking ahead to a framework for higher education which will be published in the summer, Mr Denham set out the pressures facing universities.
John Denham warns universities cannot take extra funding for granted
While denying that there were plans for a division between academic and vocational institutions, he set out the need for universities to respond to national economic needs for skills and training.
Employers needed to become more involved in course design, he suggested.
There was also a greater need for flexible courses, not only providing part-time places, but also individual learning units that could be accredited in their own right.
And he emphasised the need for universities to improve opportunities for students who might have taken a vocational path previously.
"Increasing numbers of young and older people will reach the threshold of university education through almost exclusively vocational routes," he said.
"It's fair to ask whether these students have sufficient chance to gain higher levels of skills and qualifications in our education system. If not, then higher education will need to meet these needs in future."
Mr Denham, looking ahead to the next decade, said the university sector would need more funding - but would not indicate whether this was likely to mean higher fees for students.
The speech argued that extra public investment would need greater public accountability from universities, in terms of showing quality, relevance and value.
"To justify and win support for higher investment, we will need to transform the relationship between academia and government to ensure the most effective interchange between research and public policy," said Mr Denham.
Against a tough financial background, he told universities that they would need to prove that any extra funding would be well spent and not to "take it for granted".
Already this year, the university sector is facing an increase in applications while also receiving a tough warning that institutions must not "over recruit" above a limit on extra places.
The keynote speech responded to concerns about the accessibility and quality of postgraduate courses.
'Value for money'
Postgraduate courses have become a lucrative source of fees from overseas students. But Mr Denham warned that postgraduate level studies also needed to be "attractive and attainable for a substantial number of home students".
When a competitive jobs market is demanding postgraduate qualifications, Mr Denham pointed to the need for "widening participation" to extend beyond undergraduate level.
The standard of postgraduate courses was also under scrutiny.
"Students are now raising the same concerns about information, quality and value for money they once raised about their undergraduate degrees."
The National Union of Students welcomed the call for a "much more flexible higher education system in the future, with more provision for part-time study and credit-based learning".
"Of course, such a radical vision of the future of higher education will require an equally radical overhaul of the way it is funded, and we hope the government keeps an open mind on this in its forthcoming review," said the union's president, Wes Streeting.
Universities UK says there are already "highly personalised opportunities for part-time study".
"But as part-time fees are unsubsidised and with students studying part-time not having access to the same financial support as full time students, there are clear barriers to the expansion of part-time delivery and part-time study as a choice for students."