Government proposals for top-up fees repaid via graduate contributions are classic third-way policies, according to the sociologist who devised the philosophy.
Anthony Giddens, who will step down next month after six years as director of the London School of Economics, believes that the government's proposed scheme, set out in the higher education white paper, will boost the financial health of the sector and social justice for students.
In an interview to mark the end of his tenure, Professor Giddens told The THES : "I support a graduate contribution scheme: higher education will be free at the point of delivery. I think there's a principle of equality.
It's crucial that universities get more funding and (the plan) is more equitable. It's not just for those who don't go to university to pay for those who do. The current scheme is like a middle-class subsidy."
But Professor Giddens said that higher rates of interest should be levied on student loans to end the subsidy to high-earning graduates. The government shied away from this for political reasons.
Professor Giddens also said he wanted more money to be spent on access schemes, bursaries and scholarships. He implied that the government should be forgiving of those people who failed to seize the opportunities offered to them by government policies.
He said: "Some kind of renewal is necessary. New Labour should not just have an enabling state but an ensuring state: one that doesn't just give resources and then (leave you to) fend for yourself, but one that looks after you afterwards if things go wrong.
"New Labour should stand for renewal of the public domain: public goods and public institutions. But public goods and public institutions cannot just be equated with the state. The debate fits into that wider context of renewal of the public sphere."
After leaving the LSE, Professor Giddens plans to reintegrate into academic life as a fellow of King's College, Cambridge. He is looking forward to returning to writing and speaking engagements, but he anticipates missing the LSE.
"I have enjoyed every minute of the LSE. I feel I have given my life to it," he said. "I found the LSE lovable in the way other institutions are not. Its close community and integrated campus force people to interact.
Almost everyone is research active and the school is policy oriented as it tries to have a positive impact on the world."