Students from other EU countries will benefit from the same fee remission arrangements as those in England under the Government's reforms, the Department for Education and Skills (DfES) confirmed yesterday.

This means that they will be liable to pay tuition fees of up to £3,000 a year only once they have graduated. EU students currently pay the annual £1,125 fee at the start of each year in the same way as English and Welsh students.

Experts predict a surge of interest from students in Eastern European countries that will become full EU members in May. The UK and Ireland are alone among the 15 existing EU states in offering immediate full access to their labour markets and benefit systems for the ten new members.

English universities will have an incentive to recruit students from the new EU states because they would get the £3,000 tuition payment from the Government immediately.

As EU citizens, the students would face no visa problems because they would be entitled to study and work here.

Luton University, for example, already boasts that it has become "the university of choice for students from Estonia". It plans promotions this spring in Poland, Lithuania, Slovakia, Hungary, the Czech Republic, Cyprus and Latvia to boost recruitment.

From 2006 these students will only have to sign an agreement with the Student Loans Company to repay voluntarily the £9,000 for their degree courses from their earnings once they have graduated.

Most will never have to pay anything, however, because the income thresholds for repayments will be set at the same level as those in Britain.

Charles Clarke, the Education Secretary, has set the minimum annual salary threshold at £15,000 from 2006. The average income of the 72 million people in the new EU states is £4,000. The problem threatens to consume as much as a third of the additional £1 billion in income for universities created by the Government's reforms.

More than 100,000 students attend British universities from countries that are in the EU or about to become members. From 2006, the Government will have to pay universities up to £3,000 a year for their tuition, creating a potential annual bill of £300 million, or £900 million over the course of a three-year degree.

The Student Loans Company has no right to deduct payments directly from the salaries of foreign students and would instead have to hire debt collection agencies to pursue those who failed to pay and who changed addresses or give false addresses initially.

Phil Willis, the Liberal Democrat education spokesman, said the system was open to serious abuse. Even if no fraud occurred, taxpayers would be providing massive subsidies to students from Eastern European countries to study here.

"They will be able to come here for a top-class education and not have to pay anything back because the likelihood, certainly in the first ten years, is that wage rates in places like Poland or the Czech Republic will be too low to qualify," he said.

"We are facing a large write-off of debts by taxpayers at the same time as the Government is creating a strong incentive for people to come."

Mr Willis said he had asked Alan Johnson, the Higher Education Minister, how the Government intended to handle the problem.

"The minister had told him that it did not have a solution," he said.

The DfES confirmed that repayment thresholds for foreign EU graduates would be the same as those for English students, but officials were examining the issue. The Student Loans Company was exploring arrangements with other EU states for improving the collection of student debt.

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