One of the most controversial proposals is that the university should raise money by asking students to pay top-up fees for tuition now funded entirely by the taxpayer.
Other universities would almost certainly follow suit. The Government is interested in the use of top-up fees to save public money but cannot force universities to introduce them.
The consultative paper, drawn up by a commission chaired by Dr Peter North, the vice-chancellor, will divide the university. Traditionalists will defend the college system and rich colleges will fight plans for a big redistribution of wealth to poorer colleges.
The commission argues that the college system, whereby undergraduates are admitted by a college rather than the university, creates problems. "Fragmentation of responsibility for undergraduate admissions between 30 separate college leads to duplication of effort in administering admissions."
Some dons favour a scheme under which the colleges would become residential subject departments for students studying a particular discipline. The paper also questions whether the university can afford one-to-one tutorials and whether they are too onerous for teaching staff.
The final exam could be replaced by a modular system used by many overseas universities. Instead of tutorials and lectures with an end-of-course exam, the course would be divided into short modules with an exam at the end of each.
The commission also says:"It is important to consider whether an Oxford degree course teaches its undergraduates the range of skills required for employment after university."
The document points out that many attempts have failed to resolve the problem of inequalities in colleges' wealth. Eleven are thought to have gross endowment incomes of more than £1m and five of between £2m and £5m. Others have nothing.
The levy which redistributes funds from the richer to the poorer colleges has not worked. "More radical approaches may be required," the paper says.
Oxford has raised £350m in the past six years. But the commission says cuts in public funding and growing competition for private funds means a review of how money is spent is essential.
tDons agreed yesterday to abolish the Oxford entrance examination.From next year, subject departments will be able to set tests at the time of interview.