An Israeli government committee caved in to pressure last week and halved university tuition fees for the country's 200,000 students.
The concession was welcomed by the office of beleaguered prime minister Ehud Barak, who holds the education portfolio, and was called "a historic advance" by student union leader Guy Kellner.
Tuition fees of 10,400 shekels (£1,800) a year at Israel's six universities and dozens of first-degree colleges will be cut over five years, declared the committee, chaired by retired supreme court judge Eliahu Winograd.
Yossi Kucik, director-general of the prime minister's office, said the decision was the second part of a government initiative to make life easier for Israeli students.
In the first part, the number of students offered a 20-33 per cent fee reduction for tutoring schoolchildren was doubled to 30,000. A new student loan scheme and a project to reduce fees by 50 per cent in exchange for volunteer social work were also instituted.
Mr Kucik said: "We believe that higher education is the ticket to the 21st century. We want it to be available to more and more students. It contributes to society - both the upper and lower echelons of society - and is the basis of a better economy."
The cut was possibly influenced by reports of a fall in Israelis applying for first-degree courses - and by the election for prime minister, set for February 6.
The cut will make only a marginal difference to universities' and colleges' budgets as 70 per cent is covered by the government, with student fees making up only 20 per cent and research grants the remainder. The government will now have to find an additional 800 million shekels to cover the shortfall.