The government has been urged to create a "designated contact point" for universities to work with when extremist external speakers are invited to speak on campus.
The call for clearer government guidance about challenging hate speech on campus came from the Commons Home Affairs Select Committee, which carried out a nine-month review of the Prevent strategy.
The report found that the internet was a "fertile breeding ground for terrorism" and influential in most cases of violent radicalisation, now representing more of a threat than universities, mosques or prisons.
But while the committee reported its view "that violent radicalisation is declining within the Muslim community", and questioned the extent of the "direct link" between university education and terrorist activity, it did conclude that "universities may have been complacent" and that "extremists on campus are [not] always subject to equal and robust challenge".
The committee, chaired by Keith Vaz, recommended that "a designated contact point with relevant expertise within government is provided to student unions and university administrators to assist them in making difficult decisions about speakers on campus".
Jewish students succeed in ban of LSE event
The suggestion was embraced by the Union of Jewish Students, which this week successfully appealed to LSE to cancel an invitation to an extremist speaker for an Islamic Society event.
Haitham Al Haddad, who is alleged to have described Jews as "the enemies of God, and the descendants of apes and pigs", was due at LSE on Tuesday.
Dan Sheldon, UJS campaigns director, said the recommendation was "only one aspect of a complex issue".
"It is time for government, universities and others to stop passing the buck and work together to tackle hate speech on our campuses," he said.
Other organisations warned that the conclusions about the role of the internet should not mean a less vigilant approach to university activity.
"The important thing is not to ignore one aspect at the expense of the other", said the Community Security Trust, members of which gave evidence to the inquiry.
Ghaffar Hussein, head of outreach for the counter-extremism Quilliam Foundation, added: "Extremists are still targeting university students and using online resources and social media to popularise their narratives."
The report also warned that the current anti-extremism strategy "only pays lip service to the threat from extreme far-right terrorism" and called for this not to be neglected.
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