The number of physics students has remained static

It was prompted by a move by the Institute of Physics to offer �1,000 a year to those taking physics degrees.

The grants would go to the poorest students once the government's plans to increase tuition fees were brought in.

The body is the first to offer a cash incentive to students studying a particular subject, though some universities do offer bursaries.

Its president, David Wallace, said: "Physics is vital to the future of the UK economy and the institute hopes that by offering serious cash, it can help reverse this trend as well as ensure that the brightest students are able to study what they are good at, not just what they can afford."

Too late?

Some argue that university bursaries address the problem too late.

ALTERNATIVE FUNDING Getting others to pay for your degree

The vice-chancellor of the University of Central Lancashire, Malcolm McVicar, said the UK had had a problem for years in getting enough people to study engineering, physics and chemistry.

"If you are going to turn that around, my own view is that we have to do much more work in schools, probably with children under the age of 11 to really switch them on to science.

"If they are hoping to persuade people to switch to physics then I think it's too late at 18."

But Lord Dearing - who wrote a key report on higher education in the 1990s - says youngsters will look ahead a few years at what is likely to be on offer.

He predicts that universities will "use their loaf" and lower their course fees and/or offer bursaries as incentives, rather than close departments that were struggling to attract students.

Reading University found that after introducing �1,000 bursaries for chemistry, it had a 25% increase in applications for this year and a 40% increase for 2004.

Vital

While the number of students overall has increased in recent years, the number of undergraduates reading physics has remained static.

Physics graduates, on average, have much higher salaries than graduates from other disciplines David Wallace Institute of Physics president

The Education Secretary, Charles Clarke - facing a crucial Commons vote on his tuition fee plans - welcomed the bursary idea.

"Under variable fees no student will have to pay anything up front or whilst studying at university," he said.

"They will only repay when they graduate, and then at a rate linked to their income.