SCOTLAND'S Education Secretary is "actively considering" the removal of part of a Bill aimed at reforming university governance following concerns it could jeopardise millions of pounds of investment.

Angela Constance told Holyrood's education committee that, while she is confident the legislation complies with guidelines from the Office for National Statistics (ONS), removal or amendment of the relevant sections was now under "active consideration".

The Higher Education Bill is aimed at creating greater transparency and openness in higher education governance.

However, Universities Scotland, which represents principals, says it increases the risk of reclassification by putting charitable status in doubt and potentially damaging philanthropic and entrepreneurial income streams.

Ms Constance said "Reclassification is an outcome that the Scottish Government would never want to realise.

"Considerations regarding ONS reclassification have been absolutely central to the work that has gone on around this Bill, and we have considered the issue..... prior to the actual introduction of the Bill.

"We're confident that the Bill is compliant with the indicators as laid out in the guidance. The concerns articulated by Universities Scotland and others are not concerns that I share.

"Nonetheless, there is a willingness on my behalf and on behalf of the government to look in detail at those concerns and a willingness to attempt to remove the concerns articulated by others."

Addressing whether the Bill would be changed, Ms Constance said: "That is being actively considered, whether we should look at amendment or removal."

Commenting after the committee, Liz Smith, education spokeswoman for the Scottish Conservative Party, said: "Finally, we have an admission from the Scottish Government that there is a serious problem at the heart of this Bill which would do untold damage to our university sector.

"The education minister and her officials have been under intense pressure and I hope Angela Constance will now keep her promise to ensure that any section of the Bill which threatens to increase ministerial power and re-classify universities will be removed. The whole future of the sector depends on this."

A spokeswoman at Universities Scotland said: "We welcome the Cabinet Secretary’s commitment to keep discussing the Bill with universities, as one of the key stakeholders, and her clear statement of openness to amending or removing sections which we believe heighten the risk of a reclassification.

"We are taking nothing for granted, but removal of these sections would give the sector significant peace of mind in regards to ONS."

The Bill also includes a requirement for university chairs to be appointed in line with an agreed, consistent process, with ministers planning on using this to introduce elections for these positions.

If passed it would also make sure staff, students and trade unions are all represented on university governing bodies, and would strengthen the current definition of academic freedom.