Liverpool Hope today became the first university to announce it will not charge students maximum £9,000 tuition fees from next year.
The institution's vice-chancellor, Professor Gerald Pillay, has told staff it is not fair to transfer all of Government debt to graduate debt.
A final decision on fee levels has not been made, the university said, but it is going through processes to ensure that any new fee does not include unnecessary costs.
A spokesman for the university said that details of fees for next year will be made after the university's council gave its approval, and the institution has received details of its added responsibilities to ensure poorer students are accepted onto courses.
The announcement comes just days after Universities Minister David Willetts warned that institutions which opt to charge the maximum £9,000 from next year may end up looking "rather silly" when students opt for cheaper alternatives.
MPs voted to raise tuition fees to £6,000 from 2012 at the end of last year, with institutions allowed to charge £9,000 in "exceptional circumstances."
But elite institutions like Cambridge and London's Imperial College have already announced plans to charge £9,000 for all courses, while Oxford has suggested it will need to charge at least £8,000 in order to maintain current funding.
These top universities are expected to be joined by less prestigious institutions in imposing the maximum charge, amid fears that setting lower fees may saddle them with a reputation for offering "cut-price" education.
But Mr Willetts said that for many courses there was no reason for charges above £6,000-£7,000.
He told Sky News' Murnaghan programme: "I certainly hope to see a range of fees being set by universities.
"To replace the teaching grant they are losing with the extra money coming through the student, universities don't need to go anywhere up near £9,000. For many courses it is closer to £6,000 or £7,000.
"It would be a great pity if we had this idea that you have to charge a very high price in order to establish prestige."
Mr Willets said students should be looking for a high-quality teaching experience.
He added: "Universities should remember there are other new players which want to come in and provide higher education - further education colleges for example, and there are employers who want to sponsor courses.
"If students find there are alternative providers that can offer a high-quality higher education experience for significantly less than £9,000, universities that have rushed to £9,000 will end up looking rather silly."