Mexico's National Autonomous University (UNAM) has backed down over a plan to impose higher tuition fees and has suggested that increases be paid voluntarily.
University rector Francisco Barnes de Castro has offered to extend the semester, disrupted by protests against the plan, "where necessary" and offered an amnesty to striking students.
In April, Dr Barnes de Castro announced fees would rise from a nominal 2 pesos (Pounds 0.12) a year to 1,000 pesos (Pounds 63). Exam and resit charges were also set to go up, but students from low-income families would get a discount. Overseas students would be charged a flat rate of 6,800 pesos.
Striking students, who have occupied the main campus for the past two months, rejected the proposal and demanded the rector's resignation. But the university council sanctioned the move.
The students' strike committee said the move did not fully deal with their main concern - the preservation of free education at state institutions - and that other issues, such as alternative classes, increased exam fees, alleged violation of human rights and a discussion over the development of the university, had been ignored.
"It is just a move to divide us," said a student representative after the 200-strong strike committee voted against the proposal. "There is no guarantee that fees will not become obligatory in the future. We are not greedy, but we are scared that education at UNAM is slowly being privatised."
Over 100 lecturers have come out in support of the strikers, saying the new proposals do nothing to benefit staff or offer a long-term solution to the funding crisis.
University authorities estimate the strike has cost UNAM about 1.5 billion pesos - about 10 per cent of its annual budget.