Universities could face losing their status, including public funding, if they fail to improve how they tackle harassment and sexual misconduct, under proposals from the higher education watchdog for England.

New sanctions being put forward by the Office for Students would allow the regulator to explicitly require a university to address harassment and sexual misconduct as a condition of its registration.

Any university in breach of that condition would face being deregistered, meaning they would lose state funding, barred from recruiting international students, and potentially could not award degrees, while their students could not apply for loans.

The sanction is among a range of new enforcement powers the OfS could bring against universities if they fail to make adequate progress by 2022.

The measures are set out in a new consultation, which aims to encourage universities to better protect and support students who experience racial, homophobic, transphobic, religious and ableist harassment and sexual misconduct.

Universities will have until this summer to demonstrate to the OfS that they have adequate and effective policies and processes in place, including clear procedures to report incidents, fair, independent and unbiased investigations, and appropriate support for victims.

Any university that fails to meet the regulator’s expectations could face sanctions. The regulator will evaluate universities’ progress for another two years and then assess whether its existing powers are sufficient to drive improvement.

If universities fail to improve how they handle complaints in this period, the OfS proposes bringing in new sanctions. Other regulations proposed include a duty on universities to have adequate and effective policies on harassment and sexual misconduct.

Nicola Dandridge, chief executive of the OfS, said: “We continue to hear accounts of students experiencing harassment, sexual assault and other forms of sexual misconduct. Too often students say they are not getting the support they need if they suffer this unacceptable behaviour, and that reporting systems are not clear or effective.

“Many institutions are taking concrete steps to address the issue. But we need to do more for the students who are still being let down by ineffective procedures and inadequate support.Where we see evidence of serious failings, we have the regulatory powers to intervene.”

But the proposals were criticised by senior law lecturer Rachel Fenton, of Exeter University, who said there was already sufficient evidence that universities were failing to address harassment and sexual misconduct.

She said: “This consultation is lightweight and wishy-washy. We know universities’ progress has been piecemeal. The OfS’s expectations are nothing new and too easily met.”

Fenton said around half of university staff responsible for tackling harassment and sexual misconduct, surveyed in research published by Exeter University last month, indicated that their university has only begun to address these issues.

Fenton called on the government to impose a mandatory legal duty on universities to prevent and respond effectively to sexual misconduct and harassment. She added: “Universities need to be directly accountable to the government, not to the OfS, which seems reluctant to use its enforcement powers.”

Rachel Watters, NUS Women’s Officer, said: “Students expect their universities to support them if they experience sexual violence and harassment. Unless universities can become safe environments to study in further action must be taken.”

Universities minister Chris Skidmore said: “I am urging all university leaders to prioritise a zero-tolerance culture to all harassment and sexual assault by doing all they can to support students and improve the systems for reporting incidents.”

A spokeswoman for Universities UK, which represents 136 higher education institutions, said: “Universities are committed to ensuring students and staff have a safe university experience [and] welcome the opportunity to demonstrate the progress they are making on this important issue.”