Downing Street has forced top-up fees back on the political agenda despite David Blunkett's fears that higher charges may deter learners.
Political insiders and observers say that a long-running debate between the education secretary Mr Blunkett and Tony Blair's No 10 policy unit appears to have been won by the latter.
Mr Blunkett made his views clear in his landmark speech at Greenwich University last week. He said there would be no top-up fees as long as he was secretary of state. He hinted that he would leave the job rather than oversee differential fees.
He underlined his strong personal commitment to access. He likened the old elitist university system to a kind of "aristocratic incontinence" where educational opportunity reached "the rest of us" eventually and almost by accident.
But Mr Blunkett conceded that the debate on top-up fees had to be reopened in the face of continued expansion, concerns over quality and the need to compete in a global knowledge economy. He said that an honest debate should be held in the next Parliament.
One Labour MP said: "There has been a big tussle going on between No 10 and the education department. I think the prime minister is impatient and alarmed by the pace of globalisation and does not want the UK to end up in the slow lane.
"David Blunkett has been concerned that fees may have an impact on access and that the government should wait to see the full effects. Basically, they are looking through different ends of the same telescope and No 10 is saying we cannot afford to wait."
Tom Bentley, director of think-tank Demos, said: "No 10 has a strong social inclusion agenda and David Blunkett's actions have shown that he is convinced that fees are necessary in the long run. But the prime minister's argument on the challenge of global competition is also compelling."
Shadow education secretary Theresa May said: "It fits into a pattern of battles between the DFEE and No 10 and it always seems to be No 10 that gets its way. This time No 10 appears to have just woken up to the threat of global competition."
Liberal Democrat higher education spokesman Evan Harris said: "The problem with differential fees is that there are plenty of bright wealthy students to fill universities so where does this leave the bright poor students?"
Charles Leadbeater, a senior government adviser who has written extensively on the knowledge-driven economy, wrote in The THES last October: "Universities must break out of this regulatory maze by accepting that they will have to compete in a more open market for students who pay fees using income contingent loans".
Pat Gray, a senior lecturer in public policy at Luton University and a member of the social policy network Nexus, said: "Differential fees are ideal 'third way' stuff in that they are a way of levering a competitive advantage from a mix of private and public funds."
Early in the next parliament Mr Blunkett will have served five years as Labour education spokesman. His major reforms to early years learning, schools, further education and lifelong learning and in higher education and student funding would allow him to leave on a highpoint.
Leader, page 14