Private competition was among the factors that led London Metropolitan University to set the lowest tuition fees in the sector, and other institutions will soon follow suit with "big discounts", according to the university's vice-chancellor.
Malcolm Gillies has come under fierce criticism from some London Met staff and students since setting a range of fees starting at £4,500 for 2012-13, while cutting the university's course offering by 70 per cent and scrapping subjects including history, philosophy and modern languages.
In an interview with Times Higher Education, Professor Gillies highlighted the "fundamentally different economy emerging in higher education" as the rationale for London Met's radical course of action.
The government's forthcoming White Paper is likely to expose publicly funded universities to further competition from private providers and apply pressure to institutions deemed to be demanding high fees for insufficient quality.
Asked why no other university had yet followed London Met's path, Professor Gillies pointed to the £30 million of repayments that the university must make to the Higher Education Funding Council for England over the next three years, after it wrongly claimed public money by reporting inaccurate student-completion rates.
"We are one year ahead of most of the others because of the Hefce issues," Professor Gillies said. "I think in 12 months' time, quite a few universities will be offering big discounts on fees. And I would be very surprised if London Met (ends up) giving the cheapest fee in a range of the courses that we offer."
In 2012-13, London Met's fees will range from £4,500 to £9,000, with an average fee of £6,850.
Professor Gillies stressed the need to make fees "affordable" at the university, which has more working-class students than any other in the country and faces intense private competition in the capital.
"There are 12 business schools within one mile of here," he said. "The majority are private business schools. That's hugely relevant to us."
Private competition led Professor Gillies to look at the "cross-subsidy" between high-income and low-income subjects that he said was needed for some London Met courses to survive.
In the capital, high levels of cross-subsidy could not be maintained "without paying a very high price in a very competitive market", he said.
"Any business school is self-standing. And so its value is one that's retained in full for students that pay. It is a complicated issue and one that will become more and more important for institutions."
He added: "I don't find it easy to understand how...on a £9,000 level for all fees, some universities can stand for the whole community."
Critics of London Met's shake-up have argued that it could herald a move towards vocationalism in post-1992 universities.
But Professor Gillies said London Met "isn't a leafy Russell Group university" and served "the widest range" in society.
"Any sneering at things being vocational, I think, (comes) from the elitist section of society."
He added: "We have rebuilt an entire portfolio. We've come up with the courses we think meet the aspirations of students in 2012, not the inheritance we have from courses that may go back even to the 1970s in origin...We're not about being a museum of educational curricula."
Asked if academic redundancies would run into the hundreds, he said: "I never comment on an exact number, but let me go this far and say I definitely hope not."
He rejected union suggestions that London Met would lose £6 million in 2011-12 after turning away 900 applicants for axed courses.
Stating that for every seven applicants only one student takes up a place, Professor Gillies said that the "absolute worst" loss "if we did nothing" would be £800,000.
The university is now moving on to "another fundamental review - that of postgraduate research, where we will do something pretty similar", the vice-chancellor said.
Professor Gillies contrasted London Met's "honest fee" with the "morass" of bursaries and fee waivers offered at other universities - which he said was a serious policy problem.
"I would look to the government to come up with a simplification of that," he said. "It allowed things to become so complex through weak policy."