The Coalition suffered three resignations and saw its majority slashed tonight as the Liberal Democrats split three ways over moves to hike tuition fees to up to £9,000.
As violence raged outside the Commons, 21 of the party's MPs defied desperate pleas from leader Nick Clegg and voted against the controversial rise with eight not voting.
The Government won the vote to raise fees with a majority of just 21.
It was the first real test for the Government which has a notional majority of 83. Some 323 MPs were in favour and 302 against.
The vote came after a tense five-hour debate in the Commons, which saw a number of Lib Dem MPs and a handful of Tories voice opposition to the plans.
Violence flared as thousands of protesters descended on Westminster to demonstrate against the hike.
A police officer was taken to hospital with a serious neck injury after being hurt during the clashes, and another needed hospital treatment for leg injuries after he was pulled from his horse in Parliament Square.
Two Liberal Democrat MPs resigned as ministerial aides ahead of the vote. And Tory MP Lee Scott, an aide to Transport Secretary Philip Hammond, also quit after abstaining in the vote.
Mike Crockart, parliamentary private secretary to Scottish Secretary Michael Moore, was the coalition Government's first casualty, quitting in order to vote against the proposals. Jenny Willow has also resigned.
Business Secretary Vince Cable said earlier that he was "proud" of the Government's package, which will come into force in English universities from 2012.
He insisted the package was "progressive" and would "maintain high quality universities in the long-term".
As MPs debated the issue, as many as 30,000 students, lecturers, parents and union members took part in a last-ditch demonstration against the hike.
There were violent skirmishes between police and protesters in Parliament Square, as officers were pelted with flares, sticks, snooker balls and paint balls.
Wooden benches in Parliament Square were set on fire, and two demonstrators were seen standing on top of the bonfire, watched by cheering protesters.
And a statue of wartime prime minister Winston Churchill was defaced as students climbed on to it and daubed graffiti such as "f*** police", Clegg eat s***" and "education for the masses".
As scuffles continued to break out, police began using the controversial tactic of "kettling" protesters in Parliament Square.
Some 19 people have been treated by paramedics, six of whom were taken to hospital, London Ambulance said, while Scotland Yard said seven arrests had been made.
A second Commons vote, again won by a reduced majority of 21, confirmed that the new basic fee cap will be £6,000.
It means England's universities will be able to charge up to £6,000 per year in fees from 2012, and as much as £9,000 in "exceptional circumstances". This is treble the current £3,290 cap for 2010/11.
The issue has been highly contentious for the Lib Dems who have found themselves under fire over the plans. They publicly pledged before the election to scrap the fees and vote against any increase.
Mr Cable, flanked by Prime Minister David Cameron and his deputy, Nick Clegg, faced angry cries from Labour backbenchers during the debate as he insisted the plans were "more progressive".
He said: "I don't pretend, none of us pretend, that this is an easy subject. Of course it isn't. We have had to make very difficult choices.
"We could have made a decision to drastically cut the number of university students, we could have cut student maintenance, we could have cut the funding to universities without replacing it.
"But instead we have opted for a set of policies that provides a strong base for university funding, which makes a major contribution to reducing the deficit and introducing a significantly more progressive system of graduate payments than we inherited."
Shadow business secretary John Denham said fees were being trebled "simply to reduce the 80% cut in the funding of university teaching - not to raise extra money".
A handful of Lib Dems made emotional speeches outlining their opposition to the measure.
Greg Mulholland (Leeds NW) said: "Sometimes Governments are wrong and sometimes you need the courage to say so and I am doing that today.
"I am voting against the Government today because I simply cannot accept that fees of up to £9,000 are the fairest and most sustainable way of funding higher education."
Mr Cable said today's vote was an "important step in turning the Coalition's commitment to deliver a high quality university sector that is more responsive to the needs of students into a reality.
"Under our proposals, no student will have to pay upfront for tuition and both parties in the Coalition have worked hard to develop a much fairer and progressive graduate contribution scheme," he said.
"Graduates will only begin to repay the cost of their tuition and living support once they are in high-earning jobs, with significant discounting for those on low and modest incomes."
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