TAFE institutes are to offer bachelor degrees and could compete with universities for students under a bold plan aimed at combating skills shortages.

The government-owned institutes want funding from next year to offer degrees in areas such as accounting, community services, finances and information technology.

In February next year, TAFE's Sydney Institute will begin offering a bachelor of design through its Enmore Design Centre. More bachelor degrees are expected to be offered by TAFE's Northern Institute and Western Institute in 2012.

NSW TAFE was last month accredited by the state government, under national guidelines, to become a higher-income education provider, allowing it to follow Victoria's TAFE, which is already offering a limited number of degrees.

The head of TAFE in NSW, Pam Christie, said she was reluctant to name specific degrees because the board had yet to approve those that would go ahead.