Speaking at the European University Association's annual conference, held this year at the University of Warwick, Sir Steve Smith, vice-chancellor of the University of Exeter, said that if a large gap in quality opened up between institutions charging ?9,000 and those offering less expensive courses, it could threaten the UK academy's "brand". He told the meeting of European University leaders on 23 March: "How do you guarantee quality for the lower end of the market when it costs ?9,000 to go to Oxford but only ?4,500 for a further education college?

"As soon as we damage the quality at the lower end, we damage the whole brand."

However, Professor Smith believed that the government's ÖйúAƬ reforms would force universities to attach greater importance to teaching: "Some academics speak sometimes as if it would be better if there were no students. We want [academics] to see teaching as something that is central to them."

He said the funding system that gave financial incentives for excellent research had led to the status of teaching being diminished.

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"[We] should be embarrassed as we have set up the system as it is," Professor Smith said. "We all appoint people on the quality of research...But it is like soccer - you pay people who will get you promoted."

Hannu Seristo, vice-president of Aalto University in Finland, where ÖйúAƬ is free for undergraduates, said tuition fees were vital in promoting teaching quality.

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Finland is running a pilot scheme in which universities can charge €8,000 (?6,686) a year to non-European Union master's students.

"I teach an MBA programme," he said. "If I know the people that I am teaching have paid [a combined total of] €2 million, it makes me worry about my teaching."

jack.grove@tsleducation.com.