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Universities in England could have to change or end their partnerships with countries such as China under a new system designed to protect freedom of speech.
Scholarships funded by foreign governments and partnerships that mean academic staff have to pass ideological tests may breach rules, according to the Office for Students (OfS).
It has launched a consultation on its guidance, which will come into effect in August.
Universities say they take their commitments to freedom of speech and academic freedom "extremely seriously".
From August, a new system in England will allow students, staff and visiting speakers to complain if they are concerned about restrictions on freedom of speech.
In draft guidelines, the OfS has outlined instances where universities, colleges and students' unions could, in the future, breach their free-speech duties.
They include scholarships where international students "must accept the principles of the ruling party" of their country, and where that party seeks to control students through its consulate.
They also include institutes that are part-funded by overseas organisations, and where academic staff must pass "an ideological test as a condition of appointment and employment".
The guidelines apply to all autocratic countries, but China is likely to be the principal concern.
More international students in the UK come from China than from any other country, and MPs have expressed concern about the financial reliance of universities on Chinese students.
There has been growing concern about the influence of Chinese government-funded Confucius Institutes on UK campuses.
Asked about the institutes on BBC Radio 4's Today programme, Prof Arif Ahmed, director for freedom of speech and academic freedom at the OfS, said there was "a variety of international institutions across the UK".
"We will look at each one on the basis of the evidence that we have," he said.
"Clearly if we see evidence, when it comes to us through the complaints scheme, that gives us reason to think there's a breach of the free-speech duties, then we will firmly act."
He said that action would be determined case-by-case and could involve fines.
The OfS guidelines are not restricted to the influence of foreign powers. They also say that, for example, a university handbook stating "you must always address or refer to a person using their preferred pronouns" would be "very likely to restrict freedom of speech within the law".
Universities UK, which represents more than 140 institutions, said it was "essential that any decisions made on the basis of this consultation are considered and proportionate".
"Freedom of speech and academic freedom sit at the heart of universities’ purpose, and the sector take their commitments and responsibility to protect and promote them extremely seriously," a spokesperson said.
The Russell Group, which is made up of 24 prestigious universities, welcomed the guidance but warned it "could have unintended consequences".
“Whilst some [students] receive scholarships funded by their home nation to attend university in the UK, this does not mean those individuals necessarily share or represent the views and political position of their home state," it said in a statement.
"It’s important these students aren’t discriminated against based on the views or actions of their government."
Sourced from BBC