Evelyn Ebsworth, vice chancellor and warden of Durham University, said: "The idea of more funds following students is one that has been floated by the Committee of Vice Chancellors and Principals for a long time. If you are working with a credit-based system, it will become inevitable.
"It will make life a bit more fraught but I don't expect most students will shift around much for their first degrees. It's still up to universities to make sure they can attract and keep the best students, as now."
A spokesman for the Higher Education Funding Council for England said it was still too early to assess the likely impact on the funding councils but said that the council welcomed the report's recommendations for a new compact between different stakeholders in higher education.