Learned Society concerns about control of universities
Reforms to higher education could "severely damage" the principle that protects universities from political control, an academic society has warned.
Proposals for a bill would give the Welsh government the power to directly fund universities.
But the Learned Society of Wales wants the legislation to protect universities from interference.
The Welsh government said it was considering responses to its plans.
Responding to a white paper, the society also repeats a claim that Wales' universities are "handicapped" by their "significant underfunding" compared to competing institutions in England and Scotland.
And it accuses the Welsh government of being "in denial" about the market in higher education.
Universities currently get their public funding through the Higher Education Funding Council for Wales (Hefcw).
The Further and Higher Education Bill would give ministers the power to directly fund higher education "where it is strategically appropriate to do so".
The society welcomes an assurance from Education Minister Leighton Andrews that he will not interfere in what universities teach, but says the legislation should protect the sector's autonomy.
"The society is concerned that there are real dangers in government's wish to write into law that it should have the power to directly fund higher education partnerships and collaborative activities in 'strategically appropriate' circumstances without reference to independent knowledge experts in Hefcw," it says.
"Why do this if it doesn't want more direct control of what the universities do?
"The arm's length principle under which British universities have always operated will be severely damaged in Wales, but not elsewhere.
"It is a question of whether politicians are better equipped to decide on matters of scholarship, teaching and research than expert practitioners."
The consultation on the bill - which calls for Wales to have fewer universities "with greater critical mass" - comes at a time of change in higher education.
Cardiff Metropolitan University is fighting plans to merge it with Glamorgan and Newport universities.
In its response to the white paper, the society says the Welsh government already has considerable influence through an annual remit letter to Hefcw. It also has the ability to allocate funding directly, as happened in the creation of a medical school in Swansea, it says.
Changes to the law could give future governments "unprecedented powers" to decide what subjects are taught and researched, "solely on the opinions of politicians and their paid advisers".
It points to Mr Andrews' recent intervention over this summer's GCSE English results when he ordered that they be re-graded.
"Political control of issues of scope, content and evaluation in the universities should be specifically excluded from any forthcoming legislation," it adds.
A Welsh government spokesman said: "We are currently considering all responses to our consultation on the Further and Higher Education Bill. We will publish our response shortly."