Tuition fees are currently up to �1,125 a year in advance

In a letter to The Times, the vice-chancellors of Oxford, Cambridge and three top London colleges say more cash is needed to avoid a financial crisis.

Without it, they say their global reputations may slip and support to poorer students may also suffer.

Details of the plan to allow universities to charge students up to �3,000 a year from 2006 will be outlined in Wednesday's Queen's Speech.

Some Labour backbenchers are expected to vote against the government when the draft bill enters the Commons, because they fear increased fees will deter poorer students

This will start to restore financial health to our universities Letter to Times

But the heads of Oxford, Cambridge, Imperial College London, University College London and the London School of Economics have said without higher fees, they will fall behind their US rivals.

The letter said: "The government's proposals for a new approach to student fees, which will be repayable only after graduation, are right in principle.

"This will start to restore financial health to our universities."

Bursary idea

To counter the concern over the deterrent effect on poorer students, ministers had wanted to introduce a bursary scheme funded by the fees.

GOVERNMENT PLANS Means-tested �1,000 grants from 2004 Upfront tuition fees end 2006 Fees then vary - up to �3,000 a year First �1,125 subsidised for poor Payable from graduate salary of �15,000+ Zero-rated student loan up to �4,000 a year New access regulator Teaching-only "universities" Research funding for the elite 50% participation through foundation degrees Bursary scheme?

That would require universities giving up some of their income to offer financial aid to poorer students elsewhere.

The Vice-Chancellor of Oxford University, Sir Colin Lucas, was one of the signatories to the letter.

Speaking on BBC Radio 4's Today programme on Monday, he warned that undergraduates would suffer unless more cash was made available to higher education institutions.

"If we don't get some kind of increased income, we would have to deal with a loss-making activity in such a way as to reduce the strain on university finance," he said.

"It's obvious that what would happen is we would seek to bring in students who are paying a higher fee. That would be overseas students and post-graduate students."

The Liberal Democrats are against the proposals to raise fees - and the party's education spokesperson, Phil Willis, said that they would provide extra funding through higher taxes for those earning more than �100,000 per year.

Speaking on the Today programme, Mr Willis accused the Oxford University vice-chancellor of being "naive" in his defence of tuition fees.

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"What we have seen in terms of fees income since 1998 is purely replacement money. It is not new money going into universities," he said.

And he said the variable fees being proposed would generate a "two-tier" split in higher education, which would "destroy the very essence of our university system".

Looking abroad

The letter from university heads warns that any bursary scheme must be left up to the institutions to manage, not the government.

And it says any help currently offered to poorer students would be under threat if the extra cash generated by tuition fees was jeopardised.

Analysis: Student fee plan

The universities fear the bill may be diluted by backbench opposition and reduced in its effectiveness.

Sir Richard Sykes, rector at Imperial College, told The Times the university might have to consider increasing its intake of postgraduate and foreign students, who paid full fees of up to �20,000 a year.

Stealth tax

The Conservatives are committed to scrapping tuition fees - and the Shadow Health and Education Secretary, Tim Yeo, rejected universities' claims that the extra funding was needed to widen participation in higher education.

"Top-up fees will deter young people from less well-off families from going to university, will place a huge burden on graduates in lower paid jobs, and will almost certainly be used by the government as another stealth tax," said

"University chiefs do face real challenges, but they should not be under any illusions about top-up fees - they are another way for the government to raise extra cash at a time when the public finances are in disarray."

Labour's former health secretary Frank Dobson joined the debate to suggest a scheme to link the cost of university education to the amounts parents spent on school fees.

Mr Dobson - a staunch opponent of top-up fees - suggested undergraduates should be charged the same amount each year of their degree course as their parents had paid for their secondary education.

"This would mean old Etonians would have to pay �26,000 a year," he said.

"That would be something that would appeal to the Labour Party and appeal to a lot of other people and it would be perfectly fair."

Critics of tuition fees claimed their case was strengthened last week by government research which suggested poor students had been hit hardest by the abolition of grants.

At present, the �1,125 tuition fees are means-tested and students whose parents earn less than �20,000 a year pay nothing.