Clarke offers student fees deal in final bid to buy off rebels

Two concessions are to be offered to rebel Labour MPs in the growing political row over student fees, in the hope of saving Tony Blair from what could be the worst defeat suffered by any government since the 1970s.

Charles Clarke, the Secretary of State for Education, has privately admitted that the Government's whole strategy for the funding of universities is now at risk, because of the growing number of Labour MPs who have questioned the wisdom of allowing universities to charge up to £3,000 a year in tuition fees, the figure varying from course to course.

To reduce the size of the rebellion - potentially the largest faced by any government in living memory - Mr Clarke will offer two changes, both designed to make access to higher education easier for children from poor backgrounds, according to Whitehall sources.

In its present form, the Higher Education Bill offers a free university education for any child whose family income is below £15,000 a year. Mr Clarke is expected to raise that figure to around £20,000.

He is also likely to increase the power of the new "access regulator" whose job will be to make sure that the top universities take in a higher proportion of bright children from poorer backgrounds.

But privately he has insisted that there can be no surrender on the most contentious issue in the legislation, which would mean some students paying higher fees than others.

An aide said: "It's not a pick and mix menu. The key plank of this legislation is reform of university finance, and the reform element is the variable fees. If variability were to fall, we would have to look again at the package as a whole."

The policy of variable tuition fees was adopted by Tony Blair after intense lobbying by the top universities such as Oxford, Cambridge and the big London colleges, but it has been opposed by other universities with large numbers of students from working- class backgrounds or ethnic minorities.

Writing in The Independent on Sunday today, Malcolm McVicar, vice-chancellor of the University of Central Lancashire, has warned: "We are now at the beginning of a journey which will replace the concept of a public service with a free market in higher education, a journey towards the Americanisation of English higher education."