Universities currently get their public funding through the Higher Education Funding Council for Wales (Hefcw).
HEFCW's Prof Philip Gummett said the reduction in numbers would help universities compete in the 21st Century.
The Higher Education Funding Council for Wales (HEFCW) funds teaching and research in universities and colleges in Wales.
The Higher Education Funding Council for Wales (HEFCW) said the current 11 institutions should be reduced to make the sector sustainable.
In its response to the white paper, the society says the Welsh government already has considerable influence through an annual remit letter to Hefcw.
Education Minister Leighton Andrews made a statement on university mergers based on a report by the Higher Education Funding Council for Wales (HEFCW) in the chamber on 29 November 2011 .
Following a recent report published by the Higher Education Funding Council for Wales (HEFCW), the minister revealed new proposals for the future HE in Wales, calling for institutions to be "strong, sustainable and successful".
Liberal Democrat education spokesman Aled Roberts said the Hefcw report "is based on no significant discussion with the universities themselves and there is a lack of detail regarding some of the recommendations regarding Aberystwyth, Bangor and Glyndwr universities".
The committee was gathering evidence as part of its inquiry into the next round of European Structural Funds, which Professor Phil Gummett from the higher education funding body HEFCW said was essential for funding academic research in Wales.
In a possible indication that not all of them will be approved, today also happens to be the closing date for applications to sit on a panel to which universities will be able to appeal HEFCW decisions on their fee plans.
"The society is concerned that there are real dangers in government's wish to write into law that it should have the power to directly fund higher education partnerships and collaborative activities in 'strategically appropriate' circumstances without reference to independent knowledge experts in Hefcw, " it says.
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