Universities that fail to recruit more students from poor backgrounds should be heavily fined, the man ear-marked as the head of fair access has said.
Prof Les Ebdon, the government's preferred candidate for Director of Fair Access, told MPs he was prepared to "press the nuclear button".
This means stripping universities of their right to charge top fees of up to £9,000 from 2012.
Those charging more than £6,000 have to sign an agreement with the watchdog.
At a pre-appointment hearing, Prof Ebdon told the House of Commons Business, Innovation and Skills Select Committee that refusing to sign a university's access agreement was a "significant sanction" and one that he was prepared to use if necessary.
Under the government's university funding reforms, every institution setting fees at more than £6,000 a year has to have an access agreement setting out how it plans to support and encourage poorer students to apply.
I think we will be helped by making these targets transparent”
End Quote Professor Les Ebdon Incoming Director of Fair Access
These agreements are be reviewed and approved by the Office For Fair Access (Offa) each year, with institutions that fail to meet their agreed targets on recruitment and retention facing fines or losing the right to charge higher fees.
Prof Ebdon, who is currently the vice-chancellor of Bedfordshire University and chair of the Million+ think tank, has been an outspoken critic of the government's reform plans.
He told the cross-party group of MPs that the challenge was to set strict targets and hold people to them.
"At the moment, there are two sanctions. One is a £500,000 fine, which is hardly a sanction at all, and the other is to refuse to sign an access agreement, and that is a significant sanction and that is clearly the sanction that one uses," he said.
"And I guess the task is to use the nuclear option with subtlety and that will be my role."
Prof Ebdon said he would hopefully never have to press the "nuclear button".
But he added: "Once one talks about nuclear buttons, if you ever say you will never press the nuclear button then you don't have a nuclear button.
"I think we will be helped by making these targets transparent, open, so people know what they are and to hold people to account in public.
"I think the court of public opinion is powerful."
Prof Ebdon said universities were independent, autonomous organisations and liked that to be respected.
But he added: "They should be evidence-based in their thinking, and they should know what things to do to improve participation - and they should realise that if they don't do that, there will be an office which will not be afraid to employ sanctions if they don't achieve these outcomes."
Those who persistently failed to achieve their targets needed to know there would be sanctions because "the government is serious about this agenda", he added.
Offa has always had the power to impose fines on universities that fail to boost numbers of students from poorer backgrounds, but has never used it in its history.
However, it insists it has negotiated hard behind the scenes with universities, in order to ensure concrete attempts to widen participation to non-traditional groups are made.