Universities and colleges are to be given extra money to encourage poorer students to continue studying after gaining their degrees, David Willetts has announced.

The Universities Minister said that a £25 million fund is to be created to hand out grants worth between £300,000 and £3 million to help disadvantaged postgraduate students.

The move comes amid growing concern that postgraduate education is too expensive for many people.

Under the scheme, universities and colleges will be given funding to attract and support poorer students studying for a postgraduate qualification.

The funding is on top of money announced last week by Chancellor George Osborne in his spending review, which is coming from the Government's move to "refocus" the National Scholarship Programme (NSP).

The NSP, a university scholarship scheme for poor students announced at the time that plans to triple tuition fees to a maximum of £9,000 were unveiled, amid concerns about the impact of the hike, has had its funding slashed by £100 million.

Funding for the £150 million initiative is to be cut by two-thirds to £50 million in 2015/16, and will no longer support undergraduates, with the money moved to help disadvantaged postgraduate students instead.

Mr Willett said: "Postgraduate study is good for students, good for universities, and good for the economy.

"We want talented graduates from all backgrounds to feel inspired and able to continue their education."

The Department for Business, Innovation and Skills (BIS) said it expects universities and businesses to contribute money to raise the total amount of funding available.