BRITAIN’S elite universities warned yesterday that middle class students could be denied places or charged the full cost of their degrees if the Government failed to deliver on its pledge to increase tuition fees.

In a letter to The Times, leaders of the country’s top research universities said they would fall hopelessly behind rivals in the United States unless Tony Blair faced down opposition to higher fees.

The heads of Oxford, Cambridge, Imperial College, London, University College London, and the London School of Economics spoke out just two days before the Government is to announce plans in the Queen’s Speech to raise fees to £3,000 a year from 2006.

Backbench Labour MPs are threatening to defeat the policy, arguing that it will deter poorer students. The universities fear that ministers are preparing to make so many concessions to get a Bill through the Commons that they will be trapped in a financial crisis while suffering extra state interference over access for poorer students.

Their letter said that the principle of equal access was “at risk” unless they were allowed to raise enough money to provide bursaries for students.

They continued: “This should be a matter for the universities to manage, not for the Government to impose.” The universities lose money on teaching undergraduates because the level of funding per student has halved in real terms over the past 20 years.

They insist that there must be no retreat from the Government’s White Paper plans in January to raise fees. They also want Charles Clarke, the Education Secretary, to abandon a pledge to freeze fees at £3,000 until 2011, saying charges must rise again before then.

They condemned as a “tax” demands from ministers to hand over a third of their fee income to a national bursary fund for poorer students that would be controlled by the Government.

The five institutions are the country’s research elite, receiving a third of the £1 billion in annual public funding for research. It is the first time that they have spoken out as a group about the direction of government policy, but other members of the Russell Group of 19 leading universities are understood to share their concerns.

Unless the Government held its nerve, they could be forced to turn their backs on British undergraduates and recruit more foreign and postgraduate students, who pay full fees, to raise money.

Some may seek to break out of the state system and charge middle-class students up to £20,000 a year for degree courses, while offering to reserve a minority of places for poorer government-funded entrants.

Sir Richard Sykes, Rector of Imperial College, told The Times that the universities supported the Bill to raise fees to £3,000 but could not accept a provision banning any increase until after 2011.

Mr Clarke has said fees will not rise beyond £3,000 for the whole of the next Parliament. He has also been pressing universities to divert a third of the income into bursaries to head off opposition, but vice-chancellors say they need the money to cover running costs.

Sir Richard said: “We don’t want them to lose the Bill but how much will they give away to get it through? If they give away too much, they have really blown the chance to get this system freer from government control and more financially stable. We would go downhill very rapidly and would have to consider other options.

“A number of top universities that compete on a global stage are going to have to be free of government control in the next five years, otherwise we will have lost the plot.

“We are on the back foot now and the Americans are running away with it. The £3,000 has come too late anyway and to lock it in until 2012 would really sound the death knell." Professor Malcolm Grant, Provost of UCL said: "How much better it would be to allow universities to set their own fees within a sensible range. I can't understand how the freezing iof fees at £3,000 can hope to deliver the sense of energy and freedom for universities that the government is seeking."

Sir Colin Lucas, Vice-Chancellor of Oxford, said: “We want to see the teaching funding at a level where we don’t have to keep subsidising it from other sources of income. We support the principle of what the Government is planning. But if it ceases to look like that when the Bill finally comes through, then I think we will have to think about what else we can do. We would have to think about moving to the types of income that are not capped like this.”

Sir Richard said that a fifth of students at Imperial came from outside the European Union and paid full fees of up to £20,000 a year for medicine and £15,000 for engineering.

“We would certainly have to go more for overseas students from outside the EU and change the ratio for more and more postgraduates,” he said.

“It should be market rates anyway. The Government is constantly pushing us to charge the full economic cost for what we do. That’s happening in research, why should it not happen in teaching?

“The universities should be set free and the Government should say it wants to pay for so many clinicians or whatever and we will educate them. Plenty of people are willing to pay.”

Support is rising among backbench MPs for a move to cut the tuition charge to £2,000. But Sir Colin said this would leave universities with only £900 more than the present £1,125 fee, while being obliged to fund bursaries.

Universities also remain worried about plans to establish an Office for Fair Access (Offa) — dubbed “OfToff” by critics — to boost access for working-class students. They fear that it would interfere in admissions policies, despite assurances that it would concentrate on encouraging applications from poorer students.

Sir Colin said: “The bottom line for us absolutely is that it is universities that will take the decisions about who is admitted, not government or ministers.”

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