Until now, postgraduates have made their own personal applications. But now, UCAS is planning a centralised system for PhD and Masters students. Jim Kelly reports

The scheme is an outward sign of a revolution within universities, which may ultimately be judged more important than the other big reforms of the past few decades - like the introduction of top-up fees. The expansion of postgraduate provision is changing the nature of universities, tipping the balance away from the old undergraduate model, and leading many universities towards the US, graduate-dominated blueprint.

"Postgraduate-taught courses have witnessed the largest expansion in higher education in the past 10 years," says Professor Bob Burgess, vice-chancellor of Leicester University. "From that point of view, each institution processing its own applications just doesn't make good sense."

The figures paint a startling picture. In 1994-5, there were 335,000 postgraduate enrolments, compared with 523,000 in 2003-4. Despite the runaway expansion of the undergraduate sector, it is losing ground to the postgraduate boom. The market leader for graduates is the MA - dominated by the "taught" MA over the "research" Masters. In 1998, there were 206,000 MAs; in 2002-3, 258,000.

This rapid expansion has increased university revenues, because fees are unregulated, but it has also imposed big costs. Large universities have had to employ special staff, while smaller ones have run academics and back-room staff ragged trying to keep up. Universities are under pressure to treat postgraduate students more professionally and develop their skills in a structured way. All this adds more costs.

"There are five systems of recruitment in the postgraduate area - and some universities have all five on the go," says Mike Hill, chief executive of Graduate Prospects, the official graduate careers support service, which is UCAS' partner in the project. The five range from bespoke online networks to "back of an envelope" informal internal applications. The new proposed centralised online system will not do away with them, but will radically reduce the burden because it focuses on the full-time taught MA - a core part of the market. A single system will not only, it is hoped, deal with the problems of scale.

"The problem is that what happens - even in the best-run institutions - is that students you expect don't turn up, they've made a series of applications and said yes to all of them, and then they make a decision and never tell the others," says Brian Salter, academic registrar at King's College, London. "Equally, internal applicants can just turn up." Salter welcomes the prospect of rationalisation - especially as it should cut the application process down from months to weeks - but hopes that the project will move on to encompass the far larger part-time taught MA market.

Anthony McClaran, UCAS' chief executive, says the new system will provide much needed certainty. The Postgraduate Project, as it is known, is due to be implemented in September for students starting an MA in 2007. The blueprint is clear, although almost all of the fine print is up for discussion. Applicants will be able to view details of courses online, plus supporting data on fees, bursaries, scholarships, cost of living, size of the course and so on. They will apply online, using a paperless system. After interviews, open days, or whatever process individual universities employ, students will get an offer and be able to accept it online.

While online traffic will pass through the central site, mail from universities will be "white labelled" - in other words, branded with that institution's logo. Multiple acceptances will be flagged up to institutions. Individuals will be able to track their progress online using a secure ID. A fee will almost certainly be charged, but probably only when the student gets a place.

Security is a major plus of the project and will meet government concerns that the present system can be abused to allow overseas students to use applications as a way of getting a visa, entering the country and then not turning up for the course. Given the Government's stance on cracking down on illegal immigration and terrorism, the old system had far too many loopholes. "This will certainly help," says McClaran. "UCAS has a verification unit - effectively an anti-fraud function. We will be able to pick up patterns because we will be looking at the whole system."

This ability to use a centralised application system to get a snapshot across the whole marketplace is one of the reasons - possibly the principal reason - so many institutions have agreed to push ahead. Many vice-chancellors are in the dark about how to develop efficiently the taught MA market. While university income from undergraduate courses will be capped, the potential income from unregulated fees from taught MAs is highly attractive. But what price do they charge? And which courses should they expand? Presently, they rely on anecdotal evidence to judge where there is over-provision or under-provision. Now they will be able to see crucial market data for the first time.

"I think it will mean we can see who are main competitors are, and we can begin to think about how we might modify the curriculum and perhaps the price," says Professor Burgess. There is no doubt universities are already responding to demands for different types of courses. For 2005, there were 45,000 different courses listed - whereas in 2006 the figure will be 77,000. Professor Howard Green, senior adviser to the vice-chancellor at the University of Staffordshire, says: "This will make postgraduate recruitment a structured marketing exercise, rather than a hit-and-miss free for all. We will begin to be able to match supply and demand." Such an insight will more than compensate universities for any fee they will expect to pay - probably for each student successfully recruited through the system.

The stark benefits for universities have made UCAS' proposal widely popular. But not everyone is convinced it is in the best interests of students, large numbers of whom are using taught MAs as a "top-up" for their degree, to give them extra clout in the jobs market. Others use an MA as an academic gap year, delaying a tough career decision for another 12 months.

"In my experience, MA students tend to be pretty well motivated," says Professor Susan Bassnett, of Warwick University. "I'm very surprised we need such a system now - it suggests individual motivation is not so strong. And I wonder about labelling of courses. This can be very arbitrary. We offer an MA in translation studies, for example, and I know every one of the other courses and they can range from a couple of tutors running an MA for a few students to a fully developed internationally recognised MA course. Will UCAS tell you all that? I don't think this is a particularly good idea. It's a kind of dumbing down, isn't it?" She also wonders if the use of the taught MA as a degree top-up is not leading universities down the wrong path, especially as the standard one-year UK model does not fit the European or US systems. But there is a fair wind behind the project, and it may not be solely driven by visions of lucrative expansion.

The introduction of top-up fees in England becomes a reality for students in September. The knock-on effect to postgraduates could be seismic. Parents, and students, who have just incurred debts to get a first degree, may be less than eager to embark on an MA - especially if they are just looking for a "top-up" or to bide their time. "You have to be mindful of what happened in Australia," says Salter. "There was a 40 per cent drop in postgraduate-taught applications. We might get a perturbation here - but I don't believe it will be 40 per cent."

But any reversal in growth will be keenly felt, and makes it essential that any new system minimises costs and allows for efficient operation of the market. And for the research-led universities, there is another issue. Taught MAs are seen as a way of hooking outstanding students into a research career, perhaps through the research-based dissertation required even at the taught stage. Improving the quality of PhD students, and maintaining the supply, while nurturing the best talents as future faculty, are major concerns. "If you look at better institutions round the world, one of the features they have is a high proportion of postgraduate students," says Slater.

An online application system for postgraduates, like the one envisaged, is one of the main tools which could help Britain's top universities stay in the global league.