One in eight students now obtains a first-class degree, the latest official statistics show.
Figures from the Higher Education Statistics Agency show a continued rise in the proportion of top degrees awarded by UK universities. In 2006-07, 13 per cent of students who passed received a first, the highest classification possible, representing an increase of one percentage point on the previous year. This compares with 8 per cent of students who achieved a first in 1996-97. Nearly half - 48 per cent - obtained an upper second, up from 47 per cent the previous year.
The data renewed the annual debate about grade inflation and led to renewed calls for an end to the current system of degree classification.
Peter Williams, chief executive of the Quality Assurance Agency, said: "I think these figures intensify the questions that must be asked about degree classification. Each year, they show an upwards march. If we leave it long enough, everyone will be getting a first and the degree system will have abolished itself." He added that there was a natural inertia in the higher education community about changing the system.
Roger Brown, co-director of the Centre for Higher Education Research and Development at Liverpool Hope University, said the data showed there was "clearly grade inflation going on".
One factor was heightened competition between the top institutions for students, a trend that is reinforced by league tables, said Professor Brown, a former vice-chancellor of Southampton Solent University.
In 2006-07, a total of 319,260 degrees were awarded at UK higher education institutions. Of these, 36,645 were firsts, 138,745 upper seconds, 92,795 were lower seconds, 23,195 thirds, and ,880 candidates failed their degrees with an unclassified result.
In October, the Burgess group, which was set up to review the way student achievement is recorded, concluded that all students should be issued with a detailed transcript of results - the Higher Education Achievement Report - alongside an overall classification.
The group's report, Beyond the Honours Degree Classification, says the goal is for "the existing degree classification system (to) decline in importance until it should no longer be considered necessary".
But some criticise the recommendations for not being radical enough. A letter signed by ten academics and published in Times Higher Education in October accuses the group of "drawing back from" its earlier statement that the current degree classification system was no longer "fit for purpose".
In the same month, research by Mantz Yorke, visiting professor at the department of educational research at Lancaster University, revealed a widening gap between the research-intensive Russell Group and other institutions, with the proportion of good honours awarded to undergraduates accelerating faster at Russell universities.
Another study, by the Higher Education Policy Institute, found that as many as 34 per cent of students were studying part-time while being enrolled as full-timers, with many obtaining top-class degrees.