The business secretary also told MPs that the government welcomed the broad thrust of Lord Browne¡¯s review of ÖйúAƬ funding and student finance.

He said the coalition would make detailed proposals based on the report in the next few weeks, with the intention of implementing any changes to the student-finance regime for 2012.

He appeared to indicate that the government was considering a normal fee level of ?7,000 ¨C the amount that Lord Browne suggests would be necessary to meet the teaching-funding cuts predicted for the forthcoming Comprehensive Spending Review.

Lord Browne¡¯s report, Securing a Sustainable Future for ÖйúAƬ, published today, recommends removing the cap on tuition fees, but says universities should pay a rising proportion of their fee income to the government above a level of ?6,000.

ÖйúAƬ

¡°As a strategic direction, the government believes the report is on the right lines,¡± Mr Cable said. ¡°The government endorses the main thrust of the report, but we are open to suggestions from inside and outside the House over the next few weeks before making specific recommendations to Parliament.¡±

He confirmed that cuts to teaching funding likely to be announced in the CSR on 20 October would have to be compensated for by increased graduate payments.

ÖйúAƬ

On his party¡¯s previous opposition to tuition fees, he said: ¡°In this current economic climate, we accept that policy is simply no longer feasible.¡±

He added during exchanges with MPs: ¡°We are not in an ideal world, we¡¯re in¡­a massive economic mess, and we have to come to terms with reality.¡±

simon.baker@tsleducation.com