David Willetts has given the clearest signal yet that universities may be spared a huge jump in the number of student places opened up to price-based competition between institutions in 2013-14.
Speaking at a conference on collaboration between higher education and further education, the universities and science minister also rejected criticism of "so-called Mickey Mouse degrees", saying they were "often valuable vocational courses".
The conference, held in London on 1 March, came shortly before the Higher Education Funding Council for England detailed the allocation of 20,000 "margin" places to universities and further education colleges charging fees of £7,500 or less. Universities led the way in successful bids: Anglia Ruskin University came top with 569 places and London Metropolitan University was second with 564.
But there were significant winners in further education: Hartpury College in Gloucester (352 places), Newham College in East London (294) and Newcastle College (260), which won more than neighbouring University of Northumbria (235).
In total, 9,643 places have been distributed among 35 higher education institutions, and 10,354 places among 155 further education colleges - with 65 further education colleges having a funding agreement with Hefce for the first time.
The 20,000 "margin" places represent one of two government policies designed to boost competition for degree places next year. The other allows universities unlimited recruitment of students with A-level grades of AAB and above.
No announcement has yet been made about whether, or how, the two elements will be extended in 2013-14. But at the Collaboration in the New Higher Education Landscape conference - organised jointly by the Association of Colleges, GuildHE and Universities UK - Mr Willetts appeared to indicate that the margin would be repeated but not expanded past the 20,000 mark.
"The base case is that we roll over the 20,000 in the core-margin and we repeat that," he said.
"We need to do it year after year at the same base level. I want to carry on making steady progress to spread contestability, but not to impose change in 2013-14 that is too dramatic for the sector to take."
Mr Willetts also argued that one obstacle stopping the UK replicating a University of California-style system - which allows students to transfer between vocational community colleges and research-intensive universities - was the "perennial problem of the English class system".
He was hopeful that society could escape this "burden". "Though occasionally, when I read these attacks on so-called Mickey Mouse courses - which are often really valuable vocational courses - I think we've still got more progress to make."