A hasty rethink of the access regulator's role is under way after the government's initial proposals were criticised by senior figures in higher education, including vice-chancellors, college heads and business leaders.
Draft proposals circulated this week are being hurriedly reconsidered in time for publication of the scheme's full details, expected next week.
The government will now expect universities to boost applications - rather than admissions - from disadvantaged students by showing they have outreach activities and bursary schemes.
A spokesman for the Department for Education and Skills said that the focus of their plans would be to increase numbers of applications from bright state-school pupils and pupils from less well-off families. "The access regulator will not interfere in the minutiae of universities' admissions policies and we have always made it clear that it would not.
"Having some heavy-handed approach to admissions policies would be arbitrary and would not actually tackle the problem. The problem is not about what happens once these children apply, the problem is getting them to that stage," he said.
The original aim, put forward in January's white paper, was for the regulator to promote "more rigorous admissions regimes" in addition to boosting outreach activities and bursary schemes.
But the emphasis on applications raises further problems. Universities publish entry requirements in their prospectuses, and the Universities and Colleges Admissions Service lists the normal entry requirements for each course on its website.
Applicants who have been advised of their predicted grades are unlikely to apply to places where their chances of success are limited. If pupils from poorer backgrounds are not getting the grades, then the success of outreach activities and bursary schemes will be limited.
The government is also grappling with problems of exactly how the access regulator would operate. It is proposed that universities create access agreements with the regulator, who will have the power to prevent those institutions that do not comply from charging the £3,000 tuition fee.
Ministers appear to be backing down from the suggestion that fines be imposed for institutions with high dropout rates.
The access regulator is likely to concentrate on a relatively small number of institutions that charge the £3,000 fee and have significant discrepancies between the number of students that they admit from low socioeconomic groups and their benchmark figures, which take into account the entry qualifications and the subject mix at each institution.
Some 14 institutions fall into this category: seven Russell Group universities; three other old universities; and four former polytechnics.
They are: the universities of Edinburgh, Bristol, Cambridge, Oxford, Newcastle, Leeds and Nottingham; St Andrews, Durham and Exeter; Oxford Brookes, Northumbria, Leeds Metropolitan and the University of the West of England.
Should the access regulator propose to withdraw approval for variable fees, the ombudsman will warn institutions before imposing the penalty to prevent knock-on effects on student recruitment. The University of Cambridge, for example, would lose more than £30 million overnight were it to be prevented from charging the £3,000 fee. The figure for Leeds Metropolitan University, were it to charge the £3,000 fee, would be £40 million.