The Government is under pressure to abolish the current up-front tuition fees of £1,125 a year before it replaces them with top-up fees of up to £3,000.
The move, favoured by some ministers and Labour MPs, could help to quell the backbench Labour revolt that is threatening to defeat the top-up fees plan and limit the damage to the party at the next general election.
Under the Government's proposals, variable top-up fees would be introduced in September 2006 and paid back when the graduates' income reaches a certain level. But some Labour rebels have signalled that they would rethink their position if the Government agreed to scrap up-front fees next year.
The next general election is expected in 2005 and must be held by 2006. The Tories have pledged to abolish tuition fees, and a pre-emptive strike by Labour to scrap up-front fees could reduce the appeal of the Opposition's policy to parents and students.
The move was proposed to a cabinet committee last summer by Peter Hain, the Leader of the Commons, but was not taken up by Tony Blair and Charles Clarke, the Secretary of State for Education. Although Mr Hain has not revived it in recent weeks as a way of defusing the rebellion over top-up fees, government sources said yesterday that it was "a possible fallback position".
The downside, however, is that the plan would be more expensive than some of the other concessions planned by the Government including raising the earnings threshold at which graduates must start to pay back their fees from £15,000 to £20,000 a year.
At his monthly press conference in Downing Street today, Mr Blair will tackle what he regards as the "myths and misconceptions" about the top-up fees proposal.
He held talks last night with Mr Clarke about whether the crucial Commons vote on the Higher Education Bill should be held before Christmas, as originally planned, or delayed until the new year. The vote is now expected to take place in January because Mr Blair believes that a delay would give the Government time to win over the group of more than 130 Labour MPs who have signed a Commons motion urging ministers to think again.
But Mr Clarke feared that would be seen as a sign that the Government is on the defensive and wanted a vote before Christmas. He will defend his Bill during a Commons debate tomorrow.
Yesterday, Mr Blair's official spokesman said that the element of the Bill that has run into most opposition from Labour MPs allowing variables fees at different universities and for different courses was not negotiable. He said the principles of the scheme were "set firm", adding: "Nobody should doubt the Government's resolve to get this legislation onto the statute book. Nobody should doubt the Government's determination to see this through."
Speaking in Leeds, Mr Blair said graduates would not have to find the money in advance. "They are only going to be paying this back, and it's interest-free, according to their ability to pay. But the alternative, if we need more money in universities, which we do, and more people to go to university, is that I have to tax general taxpayers more, the majority of whom have not been to university."
Mr Blair and David Blunkett, the Home Secretary, spent about 40 minutes talking to the invited guests at Fairfield Community Centre in Bramley, as part of Labour's "big conversation" with the nation launched last Friday.Reuse content