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Academics could see major changes to their working practices after a government minister this week told higher education that much of its future success relies on it providing more work-based learning.

Speaking at a breakfast meeting for employers in Sheffield, Bill Rammell, the Higher Education Minister, said that work-based learning featured prominently in the education department's discussions about the next comprehensive spending review.

Mr Rammell said: "There are no commitments as yet, but it is clear that for higher education, work-based learning ticks all the right boxes.

"Work-based or employer-led provision requires more flexible ways of working and more engagement with employers. It is clear that some universities are better at this than others."

Mr Rammell made it clear that work-based learning would play a key part in increasing demand for higher education, helping to meets its 50 per cent participation target for 2010. It could also provide a means of expansion once the school-leaver population starts to decline after 2010.

"It is a means of expanding higher education in a more cost-effective way.

It also promises to widen participation," he said.

Mr Rammell's comments build on the clear message delivered by Ruth Kelly, the former Education Secretary, in her grant letter to the Higher Education Funding Council for England in March of this year.

In it, Ms Kelly called for "radical changes" in higher education through provision that was "partly or wholly designed, funded or provided by employers". Growth should come through this employer-led provision, she said.

The Sheffield meeting is part of a series designed to promote foundation degrees to employers.

Mr Rammell said that figures from the Universities and Colleges Admissions Service for April show that 23,506 people had applied for foundation degrees for 2006-07, an 18.5 per cent increase on the same point last year.

He said: "We are well on course to meet our target of 50,000 students this September." Mr Rammell added that the Government was committed to funding 100,000 foundation degree students by 2010.

Derek Longhurst, director of Foundation Degree Forward, said: "Foundation degrees are not simply replacing HNDs and HNCs. They are expanding into new areas, notably into education and business.

"The successful universities in this area are those that enter into proper partnerships with employers and recognise that this goes well beyond the old sandwich-degree model."