The body representing the heads of all the UK's universities has produced its strongest statement yet on tuition fees - accepting that better-off students should pay more, in so-called "top-up fees".

A letter from the chief executive of Universities UK, Diana Warwick, to the new Education Secretary, Charles Clarke, says their first principle is that universities should be state funded.

But it adds "it is reasonable to expect a private contribution from those students who can afford to make it."

It says there should be safeguards to protect poorer students.

The letter follows the postponement of the government's long-awaited strategy document on higher education funding, now expected in January.

No cuts

But it now appears to be the case that ministers do intend to remove the present �1,100 cap on fees - something that was specifically ruled out in the 2001 Labour election manifesto.

Tuition fees 2002-03

Nil if parents' income less than �20,480 Sliding scale up to �1,100 on incomes over �30,502

Some of the more elite universities have signalled their willingness to charge higher fees if they are permitted to, with Imperial College, London, drawing up plans to charge �10,500 or more.

Baroness Warwick says any increase in private funding for universities must be "genuinely additional" - not offset by cuts in the existing taxpayer support.

And she says there should not be any change in the present means-testing arrangements, by which about half of undergraduates do not pay fees.

In other words "any increases would need to be confined to those who already make a contribution".

Bursary scheme

And there is a need for more clarity about who pays "as the present arrangements are not always clearly understood by prospective students and there is confusion about the scope of the means-testing".

So, "if a market based fees system were introduced", there should be a national bursary scheme to pay the fees for poorer students.

She says asking individual universities to run their own schemes would be "confusing, inefficient and inequitable".

But equally, those who do have to pay could not be expected to do so without a more flexible student loans scheme that related more to ability to pay.

Bigger loans

Students' families should be encouraged to save for the cost of higher education, perhaps through tax incentives, and the changes should be phased in.

Maximum loans 2002-03

�3,905 living away from home �4,815 away from home in London �3,090 living at home All get 75% - rest means-tested

Although the universities do not support a return of maintenance grants - abolished finally by Labour in 1997 - the upper limits on loans should be raised so they were closer to students' actual living costs.

The exception would be "the introduction of a realistic level of maintenance support for students from the lowest socio-economic groups who have an aversion to the accumulation of debt".

Research has indicated that fear of debt has been deterring the very groups Labour most wants to encourage as part of its drive to get half of young people experiencing higher education by 2010.

One size fits all

She says universities are "unequivocally opposed" to any funding solutions that favour one group of institutions at the expense of the others.

Existing extra help possible for:

childcare dependants school meals lone parents travel, books, equipment disability

"The creation of a 'two tier' higher education system will not solve the financial problems of the sector and could seriously damage the reputation of British higher education at home and abroad," she writes.

"It is an option that needs to be avoided at all costs."

Universities UK again suggests that it be allowed to work jointly with government on exploring the possible effects of different funding systems.

Otherwise, Baroness Warwick says, "there is a real danger that damaging unforeseen consequences could emerge later".

She adds: "We are not aware that this important feasibility work has been carried out".

This includes the cross-border implications of the policies, in view of the different systems emerging within the UK.

Scottish ministers in particular regard top-up fees as "unacceptable".