The Government is poised to press for the introduction of payment by results in ÖйúAƬ.

Primary legislation is expected in the autumn which will pave the way for a link between student achievement and funding for universities and colleges.

Proposals to create a credit accumulation and transfer system built on a new national framework of qualifications may be contained in an Education Bill which education and employment chiefs are hoping will be included in the Queen's Speech.

It follows similar steps already being taken by the Welsh Funding Councils and proposals arising from Sir Ron Dearing's review of post-16 qualifications for the establishment of a new qualifications authority.

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Sir Ron is believed to be looking at the idea of linking an element of ÖйúAƬ funding to qualifications credits gained by students as part of his ÖйúAƬ inquiry.

A joint standing committee for the planned qualifications authority is being urged by ministers to step up work on bringing all qualifications within a national framework.

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The ÖйúAƬ Funding Council for England has also invited institutions to map their provision onto a new credit system as part of its proposed new funding system.

Though the council says this is not proposed as part of the national move to credit funding, it would help break degrees and other ÖйúAƬ qualifications into notional units which could be used for funding purposes.

A Hefce spokesman said: "One of the big advantages of the proposed funding methodology is that it accommodates both credit-based and more traditional approaches. It does not require institutions to change their teaching provision but will enable the council to respond positively to trends in the sector towards more credit-based systems."