“The university must stop pursuing the quasi-virtual strategy and must submit a new strategic plan to Higher Education for approval by September 30,” Advanced Education Minister Dimitrios Nikolaidis said in a statement on Tuesday. “Failure to comply will result in reductions in Athabasca’s future funding.” Nikolaidis informed the school of the changes in a letter sent over the weekend. In it, Nikolaidis tells the school’s board of trustees that he has until the end of August to instruct school president Peter Scott to stop implementing what is known as the university’s “near-virtual” strategy. In addition, Nicolaides writes, the board must then help Scott create a new strategy “that expands and strengthens the university’s physical presence in the city of Athabasca.” This new strategy must be submitted to Nikolaidis for approval by the end of September. Failure to do so, Nikolaidis said, “will allow the Department of Advanced Education to withhold the $3.43 million monthly installment of Athabasca University’s core operating grant.” The letter also stipulates that all university executive members stay in the city until April 2025 at the latest. Kristine Williamson, a spokeswoman for the university, did not immediately respond to an email request for comment. The letter escalates a standoff between the province and the university over the school’s mandate. Before the COVID-19 pandemic, the university instituted the “virtual” plan to give employees more freedom about where they perform their work. This plan was accelerated when the pandemic forced people to work from home. Scott has publicly argued that the school’s goal is to provide the best distance education with the highest quality staff — a mandate that would be hindered by the requirement that workers work in Athabasca. Nikolaidis says high quality can still be maintained while maintaining the commitment to economic diversification that led to Athabasca’s relocation from Edmonton nearly 40 years ago. Nicolaidis instructed the university in March to deliver by June 30 a plan for resuming and expanding in-person work. In May, the province replaced Nancy Laird as chair of Athabasca University’s board of trustees to speed up the shift. She was replaced by Calgary lawyer Byron Nelson. However, the change was rejected by Scott. Scott, in an April e-mail to staff, said “ongoing work with our near-virtual workforce will continue.” He also noted that the university closed satellites in Calgary and Edmonton to focus on Athabasca. Nikolaidis said Tuesday that the June 30 response did not pass, leading to “the need for the Alberta government to take meaningful action.” Local residents have also taken up the fight. The Keep Athabasca advocacy group at Athabasca University has argued for more of a local presence, concerned that a small fraction of about 1,200 employees remain in the city. The group hired a lobbyist to make their case and, in March, Premier Jason Kenney himself came to town to promise changes to bring people back. Athabasca University has approximately 40,000 students. The Morning Update and Afternoon Update newsletters are written by Globe editors, giving you a concise summary of the day’s most important headlines. Sign up today.