Golden hellos of up to Pounds 1,000 a year will be offered to young university hopefuls from poor backgrounds.
Education secretary David Blunkett this week announced details of a Pounds 10 million cash pot to support the bursary scheme that starts from next autumn.
The bursaries, originally announced in January, will be available on a means-tested basis, and individuals will know how much cash they are eligible for before making up their minds on a university place.
Mr Blunkett, speaking at the Association of University Teachers' annual council meeting in Eastbourne, said the scheme is part of a government drive to increase higher education access.
An extra Pounds 4 million will also go to the so-called postcode premium paid to universities for recruiting people from areas where few people go to university. It takes the total widening participation fund to Pounds 23 million.
Mr Blunkett attacked universities that recruit less than 50 per cent of their students from state schools.
Medical schools were the worst offenders, he said, and singled out the Royal Free, Guy's and St Thomas's and St George's.
He also criticised admissions tutors for prejudice. "We should look at the way admissions officers perceive youngsters from particular backgrounds and help them overcome their inexperience in understanding some dialect and accents", he said.
In his opening address, AUT president Alan Carr painted a devastating picture of higher education under the next administration if the sector is subjected to further funding cuts.
The government risks driving higher education to a return to the binary divide in which the best universities are pushed into privatisation while socially disadvantaged students are left to go to third-rate universities at the bottom of the pile, he said.
He said his portrayal of the future, in which national bargaining will collapse, was based on "the harsh and unpleasant realities that we face".
"There is no continuing capacity to absorb the kind of year-on-year cuts in funding that we have experienced for the past 25 years," he said. Mr Carr said the sector, already in crisis, was on a knife-edge waiting for the results of the comprehensive spending review in July. "The consequences will be cataclysmic if the current financial regime remains in place following the July settlement."
Mr Carr warned that the national system of pay determination was already on the point of collapse. "It is well known that groups of universities and colleges are making plans to break away and do their own thing."
Combined with continued funding cuts, decentralised pay determination would lead to more unfairness and inequality, through "greater stratification as it drives the system towards privatisation".
David Blunkett, page 14 Not forgotten: Greenwich University was today opening an art gallery in memory of Stephen Lawrence, who was murdered in 1993. Permanently exhibited will be a double portrait of Stephen and his mother, Doreen, by London artist Jennifer Lewis. Stephen had hoped to study architecture at Greenwich. The space was designed by Tunde Shoderu, pictured here with Ms Lewis