The Australian government has tempered some of its more contentious higher education reforms with a promise of an additional A$1.5 billion (£618 million) for higher education over the next four years, plus more than A$660 million extra a year from 2007.
The surprise concession, in legislation tabled in the house of representatives, aims to gain support in the senate. Higher education minister Brendan Nelson heeded calls from vice-chancellors to ease restrictions on universities over-enrolling beyond the government quota, to modify plans for scholarships and to provide more funding for regional universities.
If the reforms are passed, universities will be able to impose top-up fees that could increase tuition charges by up to 30 per cent for students starting an undergraduate degree in 2005, other than those enrolled on teaching and nursing courses.
To boost their incomes further, universities will be able to offer full-fee places to Australian students for up to half the enrolments in any undergraduate subject.
The oldest and most prestigious institutions would benefit most and critics claim it could lead to a two-tier system of wealthy versus impoverished universities.
Under government plans, a new scheme would be introduced to help students meet some of the cost of full-fee courses by offering loans up to a maximum of A$50,000 in both public and private universities. Unlike the current interest-free Higher Education Contribution Scheme, where students can defer tuition fees until they graduate, the loans would carry an interest rate of more than 6 per cent.
Among other changes, the government plans to introduce a five-year "learning entitlement", and if students wish to remain in an undergraduate course for longer, they will have to take out a loan and pay full fees.
"This legislation is absolutely essential to equip Australia for the 21st century - educationally, culturally, socially and economically," Dr Nelson said.
To improve the quality of teaching, universities will for the first time have access to A$138 million over the first four years for a learning and teaching performance fund, Dr Nelson said.
To access the money, universities must have systematic student evaluation of teaching and it must be published. Probation and promotion within the university will depend as much on teaching as it does on research.
While vice-chancellors welcomed the promised increase in spending, they joined academic and student groups in their concern at the effect of the government's reforms on poor students. They have also objected to plans to link the boost in spending to changes in university governance structures and the way staff are employed.
As parliament recessed for a fortnight last week, debate on the legislation will not take place until next month. The three bills - the main one is 200 pages long - then face substantial amendments or outright rejection when they go to the senate.
The upper house will not consider the legislation until after a committee looking into the implications of the proposed reforms concludes its investigation early in November. The Australian Vice-chancellors' Committee said it was deeply concerned at the possible delay in the legislation being passed.
The senate committee has already received 500 submissions - with only half a dozen said to be favourable to the government - and many late contributions are certain to arrive once the sector has time to consider the legislation.
Neither the government nor Labor has the numbers in senate to have the legis-lation approved or to impose changes. Both parties will have to rely on four independents to achieve their aims and their attitude to the reforms will not be known until a vote is taken.