Some universities may pull out of teacher training because of plans published today to set a common price for teacher education courses in England from 1997 onwards.

The scheme would also rate providers according to quality, according to the consultative document from the Government's Teacher Training Agency.

"Price tariffs" are to be the basis for a new funding methodology similar to that introduced for further education colleges. They are designed to eradicate what Anthea Millett, agency chief executive, calls "the current financial maze under which the agency can pay between Pounds 810 to more than Pounds 3,700 to different providers for exactly the same provision".

John Howson, director of educationat Oxford Brookes University, warned that institutions might withdraw from teacher training. "Vice chancellors may feel that this is becoming too much hard work, particularly in some of the larger universities," he said.

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The agency based its report on a review of teacher training carried out by Coopers and Lybrand. It acknowledges that, although a common price will be set after an analysis of "real costs", including the total funding available to TTA, this will need to vary, for example between phases, secondary subjects and routes into the profession.

The report says that the methodology would enable new providers to start up as well as existing ones to be stopped. The agency wants its pricing policy to encourage recruitment to shortage subjects.

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It believes that over-recruitment should be rewarded by extra numbers and funding the following year and under-recruitment penalised, as would over-recruitment in areas with excess applicants, for example primary training.

Funding for courses will also be geared to output. The agency proposes that 10 per cent of a course's funding should be withheld pending a successful outcome, that is, a student who has completed training and secured a teaching post.

Coopers and Lybrand stressed that institutions that have received more funding to meet their higher investment will no longer do so, and will have to cut costs. There should be no price difference between full or part-time courses or on the basis of geography, with the exception of inner city providers.

Ian Kane, the chair of the University Council for the Education of teachers described the whole pricing methodology and linking of funding to quality as arcane.

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