A row over which business model to pursue for the e-university threatens to delay its establishment, which is scheduled for early next year, writes Alison Goddard.

A meeting of the steering group last week ended in a "Mexican stand-off".

Funding council chiefs envisage the e-university as a collaboration between a small number of core partners - high-quality universities and colleges and private-sector companies - which would develop a corporate structure and strategy.

But many universities and colleges want a more inclusive model in which all institutions could design and deliver materials to a world-class common framework.

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The e-university could operate as a free-standing institution in competition with existing universities.

Alternatively, it could operate as a broker that commissions its own material, in the same way as the University for Industry.

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The options were outlined in a report from consultants PricewaterhouseCoopers.

An insider at the meeting estimated that it could take up to two months to resolve the conflict.

Invitations to express interest in becoming a core partner in the e-university were to be issued to universities and colleges next week, but they will not now go out until the business model becomes clearer.

There is also a tension between whether to create an e-university from scratch or to support the evolution of an e-university from existing provision.

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Roy Leich, assistant principal for learning strategy at Heriot-Watt University, said: "Establishing a separate organisation is not the most effective way of developing an e-university.