Tony Blair has decided that it was not worth antagonising the powerful and articulate Oxbridge lobby headed by Lord Jenkins, the chancellor of Oxford University, for the sake of pounds 35m paid each year in student fees to individual colleges.
Mr Blair has also thwarted the efforts of David Blunkett, Secretary of State for Education, and Tessa Blackstone, the higher education minister, who wanted the money paid in fees to be conditional on Oxford and Cambridge accepting more pupils from state schools.
But the colleges at the two universities, who use the fees to pay for their libraries and tutorial support for students, have won only a partial victory. A carefully crafted compromise to be announced shortly will leave the present arrangements unchanged for next financial year and will allow for inflation.
After that, the fees will be phased out. Instead, the universities as a whole will receive an unspecified amount of money towards the upkeep of their ancient buildings. They will also be entitled to bid for money from a new scheme set up by the Higher Education Funding Council, the quango which distributes university funds, which will reward universities where the quality of teaching is high.
Though the money will go to other universities as well as to Oxbridge, the council expects that both universities will do well out of the scheme.
Oxbridge colleges have been campaigning to keep the fees which, they argue, are essential if the distinctive nature and tutorial system at the two universities is to be preserved.
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