CANBERRA, March 31 - The Group of Eight leading universities says it is concerned the Senate will not accept deregulation of university fees, and that the original intention of reforms has been lost because of a series of compromises by Education Minister Christopher Pyne to win over hostile crossbench senators.
Any package passed by the Senate would be so highly watered down that it could no longer be acceptable.
"We support deregulation as an alternative model - that isn't going to happen in this Senate," the group's chief executive Vicki Thomson told AAP on Tuesday.
"In the absence of any solution we need to press the reset button and have a review of the sector."
Thomson said a new review of university and research funding should be de-politicised to remove the political animosity towards deregulation.
However, Pyne has rejected that proposal, arguing the sector has already faced 33 reviews since 1950.
"Another is not a substitute for action," a spokesman for the minister told AAP in a statement.
The government had the right policy for higher education.
"And we will continue to press it," the spokesman said.
The reforms could head back to the Senate for a third time during the winter sitting period, after being rejected twice by the upper house.
Independent senator Nick Xenophon, who voted against the bill both times, said the government should heed the calls for another review as an alternative to its "radical" deregulation reforms.
"Obviously I didn't teach (Mr Pyne) negotiation skills very well - I apologise to the Australian people for that," he told ABC radio, a reference to his days as Pyne's tutor.
Labor says the Group of Eight's declaration is another embarrassing defeat of Pyne's plans.
It should finally put an end to efforts to deregulate university fees, higher education spokesman Kim Carr said.