OXBRIDGE should be able to maintain its "special character" under any future funding arrangements, the Higher Education Funding Council for England stressed this week.
But colleges remain no wiser about whether they will be able to keep the college fee, worth about Pounds 17 million to each university.
Board members of HEFCE who met this week say the government asked for advice to be given in confidence.
They will now compile a commentary on their discussions, which included three main options, each involving a number of different permutations. These ranged from maintaining the present system to replacing college fee income with a grant to the universities - an option unpopular with colleges because it would mean losing much control over their finances to central administration.
The final decision will be made by the government. It is understood that disagreements exist between the Department for Education and Employment and Downing Street on both college fees and top-up fees.
A statement from HEFCE said: "The board of the HEFCE confirmed its support for excellence in teaching and research and agreed that it should do nothing to damage the special character and world-class standing of education at Oxford and Cambridge."
It added: "If the option chosen led to a reduction in funding, the council would want to avoid damage to the quality of college teaching and research." This suggests any reduction in fee income would be gradual, or would be made up from other sources of funding.
In the longer term, the council said it wanted to consider a premium for teaching quality, to be applied across the English higher education sector. Oxford and Cambridge both score highly in teaching quality assessments and would benefit from any such premium.
George Reid, Cambridge college fees committee chairman, said: "We are very confident about the premium for teaching quality so there is no doubt that would be good news. But it is a future initiative. We hope we will be given more information soon on college fees because we cannot do anything with this level of information."
Colin Lucas, Oxford University vice chancellor, said he was heartened by HEFCE's pledge to maintain Oxbridge's special standing.