The government's higher education review paper, expected to be published in the next ten days, will be "radical" and "highly contentious", higher education minister Margaret Hodge told academics and students this week.
She made her comments during a visit to Nottingham University on Tuesday, rescheduled from an appointment she had postponed in December last year.
In a private seminar with vice-chancellor Sir Colin Campbell, students, and economics professor David Greenaway - who co-wrote a report commissioned by the Russell Group that called for the introduction of top-up fees - she said the paper would need to achieve a careful balancing act.
But in a press briefing after the meeting she was careful not to reveal details of what the paper contained, including the question of whether universities should be allowed to charge top-up or differential fees.
She told The THES : "People recognise that there is a funding dilemma in higher education, and therefore there is a diversity of views on how to deal with it. We are all going to see that our paper will contain a really powerful, radical and positive set of proposals to enhance the status of higher education."
Ms Hodge said that the paper would be "greener in some parts than in others", but the funding proposals would be "green". They would aim to give universities more financial stability and greater autonomy.
"All the discussions I have had have been about how we can work together to put institutions on a firmer funding basis. We certainly want to give universities extra freedom, and a lot of the actions we have taken have demonstrated that," she added.
Sir Colin said that although his support for the introduction of differential fees was well known, he had given up trying to second guess what the government planned to do.
He said: "This is not a matter of ideology, it is just a question of what will work. If someone can come up with something that will work better than what we have suggested, then fine."
He added that whatever the government's proposals, Nottingham would not opt out of state control and he doubted any other institution would be able to do so.
Naakuu Paul-Birabi, president of Nottingham's students' union, told the minister that his main concern was that higher fees would deter poorer students from entering higher education.
"She said she came to listen to us. We will have to wait to see whether she heard what we had to say," he said.
• The Liberal Democrats would ration honours degree places as part of a revision of higher education policy, announced this week in a bid to pre-empt the government's forthcoming strategy document.
Liberal Democrat education spokesman Phil Willis said it was time to re-engineer the higher education sector. The party expects to complete its review of higher education policy this autumn.
As a first step, Mr Willis said his party would abolish the government's 50 per cent participation target. The party would seek to ration the number of full degree places available by choking off expansion cash.
Instead, resources would be redeployed to sub-degree and level-three qualifications, which is where the UK's skills shortages lie, the party said.
Expansion would occur at a new foundation stage. This would build on the government's two-year foundation degrees but, unlike the current format, would apply to all subjects, not solely vocational courses.
People would be able to take foundation courses, lasting a year or two, as employees or before starting work. Much of this learning would take place in further education colleges and most of the students would be expected to live at home, keeping their maintenance costs to a minimum.
All coursework would be credited so previous learning would count towards further courses, including honours degrees.
Details of how tuition costs would be paid are still being worked out and the party is waiting to see the outcome of the government's strategy document.
But the early indications are that the party favours setting up a national learning bank that would entitle people to cash credits towards approved courses.
Maintenance costs for students on sub-degree courses would be low but support for students on traditional three or four-year honours degree courses would remain high.
The party sees its proposals as similar to the system operating in Scotland, where graduates pay a contribution that goes towards supporting future generations of students.