PM overrules Brown to allow top-up student fees

Tony Blair will press ahead with controversial plans to allow universities to charge top-up fees by overruling a last-minute attempt by Gordon Brown to block the move.

Downing Street yesterday dismissed reports that the Government's long-awaited White Paper on higher education would be delayed by a dispute between the Chancellor and Charles Clarke, the Secretary of State for Education.

Mr Brown wants to keep open the option of a flat-rate graduate tax on all graduates to create a central pool of money for higher education. Mr Clarke wants universities to able to charge up to £3,000 a year in top-up fees with graduates repaying their individual fees when they are in work. The signs last night were that Mr Clarke would get his way.

At a stormy Cabinet committee meeting on Thursday, the Chancellor is said to have rejected claims by universities that they face a funding crisis. He is anxious to ensure the Government's plans do not deter students from poor families from going to university.

Mr Blair's official spokes-man insisted yesterday that changes were needed to tackle university underfunding. He said: "We will do nothing to deter people from going to university, particularly those from poorer backgrounds. It is important people don't misrepresent that. But if we don't grasp this particular nettle, then we will not have the skills base in the future which we need."

Downing Street insisted most of the policy decisions had been agreed and only "fine-tuning" remained. "The White Paper will be published next week," the spokesman said.

The Department for Education and Skills said: "We are still on course for next week. People will not be paying thousands of pounds up front, and access for people from poorer backgrounds is fundamental." It is believed that universities can levy top-up fees only if they have a good record on access.

Despite fears that the unseemly row would overshadow a key policy launch next week, the battle continued yesterday, with both the Brown and Clarke camps accusing each other of briefing the press. Mr Blair and his deputy John Prescott, who chaired the Cabinet committee meeting, were furious the dispute had become public.

Mr Brown's opponents claimed he was "isolated", and his allies claimed seven Cabinet ministers had expressed reservations about the Clarke scheme. Ian Gibson, Labour MP for Norwich North, warned that there could be "an uproar" if universities were allowed to charge differential fees. "People will not tolerate a two-tier system. I am sure there is a battle royal going on between the different interest groups now in Downing Street."

Mr Brown is expected to announce a big cash boost for universities next week, although it will be less than the £10bn demanded by vice-chancellors. Wide-ranging reforms in the White Paper include phasing out so-called "Mickey Mouse" degrees in marginal subjects, closing poorly run universities and ensuring universities forge closer links with local communities.

Barry Sheerman, Labour chairman of the Commons education select committee, said he was astounded by the reported Cabinet split. "I hope the Prime Minister will come in, bang a few heads together and say, 'Come on, this is one of the most significant strategy documents of the two Labour administrations'," he said. "If there has been difficulty and feuding behind the scenes, that has to be sorted."