While university leaders welcomed the move as a realistic response to a crisis in university funding, the National Union of Students warned that fees would damage access to higher education for poorer would-be undergraduates.
The NUS president, Douglas Trainer, said: "We are totally opposed to any suggestion that students should pick up the bill for tuition. Once the principle of free tuition is breached, the door is open for universities to charge whatever they want for different courses and different colleges."
However, the Committee of Vice Chancellors and Principals welcomed the "bold decision" by David Blunkett, Secretary of State for Education, to accept that full-time undergraduates must pay after graduation towards the cost of teaching.
The CVCP chief executive, Diana Warwick, said: "This is a necessary step to maintain the quality of their teaching and learning experience and provide a basis for future expansion."
However, the committee called on the Government to slash 6.5 per cent cuts in higher education funding planned over the next two years to no more than 2 per cent.
The Association of Colleges, which represents the further education sector, warmly welcomed proposals to expand higher education partly by increasing the number of students taking diplomas and certificates.
But it suggested the committee had failed to "grasp the nettle" and impose even higher tuition fees on graduates in order to release more funds into the impoverished further education sector.
Industry leaders also gave as qualified welcome to the report. The Confederation of British Industry supported proposals to expand student numbers and underpin quality of qualifications, but questioned the government's decision to abolish student grants.
Higher education unions praised the report, but said urgent steps were needed to remedy the funding crisis.
The Association of University Teachers said all income from fees must be ring-fenced for spending on higher education. The government must ensure universities did not introduce their own top-up fees, the union said.
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