Higher tuition fees are inevitable unless the government comes up with more money for universities in next week's spending review, it was claimed this week.
Barry Sheerman MP, chairman of the education select committee, joined vice-chancellors in pleading for more state money for universities before next Tuesday's spending review.
The review will set spending targets up to 2004. Universities had hoped it could spell the end of their year-on-year 1 per cent funding cut.
But The THES revealed last month that senior government officials have been considering cuts in public funding of up to 3 per cent. Sources at Westminster now say that the cut may be 1 or 1.5 per cent.
Labour MP Mr Sheerman (Huddersfield) said: "There is a strong force of opinion moving in the direction of top-up fees and (I think) they are inevitable unless we can think of other funding streams.
"(Universities) cannot go on as (they) are. Crisis is imminent and, cutting to the chase, the real part of this is money and resources. If we do not have a system that delivers diversity and qualityI then the university system is dead."
Mr Sheerman was speaking at a seminar on the future of higher education, organised by the Association of University Teachers and held at the London School of Economics.
LSE director Anthony Giddens said: "The LSE is a cash-strapped organisation trying to compete with the very best institutions in the world with less resources.
"I see no way of sustaining competitiveness without further resources. As far as I can see, the only two big sources of this are government grants and private fees. For me now, the key thing is to persuade government to put substantial funding into universities," he said.
After the meeting, Professor Giddens said: "I certainly think the discussion on fees should continue. But I am not in favour of the privatisation of universities. A mixed funding system is required. So, while fees have to be on the agenda, they are not the only answer."
It is widely anticipated that any extra money for higher education in the spending review will be earmarked for specific initiatives, such as widening participation.
Such cash would do little to improve the funding of core teaching activities in universities. Tony Bruce, policy director for the Committee of Vice-Chancellors and Principals, said: "We have made the best case we can to government for extra funding. If the basic outcome of the spending review is continued deterioration in the unit of funding then it will bring the question of funding reform to the top of the agenda."