Diet Coke, Waitrose Essentials and now University Lite...It doesn't quite sound right, does it? Yet respectable, mid-ranking universities are starting to flirt with the supermarket model of "sub-brands" for fear of losing business to cheaper, often private sector, rivals.

This, it seems, is yet another extension of the ripple effect of the higher education reforms, which has already been compared in these pages to the cautionary tale of the woman who swallowed a fly and ended up eating a horse.

This week, as well as the fallout from the extraordinary decision by the UK Border Agency to strip London Metropolitan University of its highly trusted sponsor status, we report on plans by the University of Hertfordshire to establish a private offshoot in conjunction with a local further education college, which will initially focus on business courses.

Several other universities are pursuing similar strategies. The Hertfordshire college is likely to set fees lower than those charged by the mother ship, and it is expected to attract a different type of student, offering out-of-hours teaching and greater flexibility for part-timers already in the workplace.

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The rationale for the venture is entirely understandable when universities are being asked to compete ever more fiercely with so-called "alternative providers", which are in turn expanding and setting up bases outside their traditional hunting grounds in London.

For an institution such as Hertfordshire, which is located in a county well within striking distance of the capital and is, as such, a likely target for expansion by some of the more ambitious private providers, preventative action - filling any vacuum before a rival does - is a reasonable strategy.

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But one has to wonder if this is what the coalition government intended when it called for a greater range of providers to throw their hat into the higher education ring, an invitation that it hoped would improve the offering available to students. Is a university setting up a private offshoot to compete with itself what the government had in mind? Maybe it was if it keeps fees, and costs, down.

Speaking in 2010, in his first keynote speech as universities minister, David Willetts argued that "an autonomous system is one that needs to innovate continually. Its provision must be diverse...It must adapt to competition from new providers."

Whatever the government's thoughts, the trend raises wider questions about sense of identity within the sector. While decisions taken locally will be based on specific circumstances and may very well be the correct ones from a business point of view, it does seem a worry generally if universities are preoccupied by commercial threats - real or imagined - rather than focusing on the grand tradition of The University, what they are for and what they do best.

And if such concerns are too vague or highfalutin' then the ³ÉÈËVRÊÓƵ Funding Council for England also offers some worries of the common or garden variety.

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As we report this week, Hefce officials fear that some of the "new structures" being trialled by universities could enable institutions to avoid the strictures of the student number caps and other regulatory controls.

If so, it could be the government - ever keen to keep an iron grip on such matters - that gets its fingers burned. It wouldn't be the first time.

john.gill@tsleducation.com.