The creation of a new online university touted by Labor leader Kim Beazley to the Parliamentary Press Club last night, has drawn harsh criticism from Charles Sturt University Vice-Chancellor Professor Cliff Blake who suggests the proposal may hold very significant threats to CSU.

"This University is already Australia's largest provider of distance education and probably the most advanced in the Commonwealth in delivery of its courses online to students in Australia and overseas.

"The real problem we have in giving greater access to courses, is not the limitations imposed by the modes of delivery but simply that we do not have additional Commonwealth funded places needed to admit additional students," he said.

Professor Blake said he welcomed Mr Beazley's proposal to increase by up to 100 000 the additional funded places available and his commitment to halving HECS payments but was wary of a proposal that duplicated existing services.

"If the University of Australia Online that he proposed were to be a new free-standing institution then it would simply duplicate services already available in a number of Australian universities.

"This would especially effect Charles Sturt University and place in severe jeopardy, the future of this University which already has some 65 per cent of students studying by distance education and mostly by online delivery techniques.

"If on the other hand he is proposing to harness existing online expertise and services to provide additional resources and funded places then CSU could welcome the new initiative," he said.

The previous Labor Government's creation of the Open Learning Agency (OLA), some 10 years ago Professor Blake said was not a success causing universities to be understandably cautious of this latest proposal.

"In so many ways the proposed University of Australia Online appears to mirror a number of concepts embedded in the OLA, which has done little to satisfy student needs," Professor Blake said.