Private institutions are trying to recruit local students by undercutting university education costs.
Robert Taylor, vice-chancellor of the University of Buckingham, said: "The university is advertising a scholarship scheme to local students that states: 'In fact, it need cost no more to study at the University of Buckingham than any other British university'."
Under Buckingham's regional scholarship scheme, students pay Pounds 8,000 in tuition fees over two years for a degree. This compares with a top whack of Pounds 3,075 that students at state institutions must pay over the three years. The university argues that students can save Pounds 5,000 because they need living expenses for only two years.
Student numbers at the university have fallen from 1,000 to 700 in four years. A quarter of students are British.
The European Business School in London, with 730 students, is also seeking to raise its British intake, from 15 per to 20 per cent.
EBS is hoping to run a five-year course that leads to a masters. If successful, it could represent the next step in the consortium of colleges at the Regent's Park campus becoming Britain's second private university.
The other institutions are the School of Psychotherapy and Counselling, the British-American College in London, and the Regent's Business School.