Senior Labour rebels would rather the higher education bill fall, even if it meant no more money for higher education, than help to introduce variable fees.
Nick Brown, a former chief whip and a close ally of chancellor Gordon Brown, said: "I can understand that universities are worried about their funding, but variability is not the solution."
He said that his opposition to the government's proposals to introduce variable top-up fees was threefold: "The manifesto promise not to introduce top-up fees was clear-cut; the level of debt faced by poor students is too high; the proposition as currently framed will introduce a market into higher education, which I think is fundamentally wrong."
Ian Gibson, MP for Norwich North and one of the leading Labour rebels, supported Mr Brown's stance. He said he knew of 100 Labour MPs who intended to vote against the bill on its second reading, which is due in late January.
Last week, Mr Brown offered belated support for the government's higher education policy. He said that top-up fees were fair because, over a lifetime, graduates earn twice as much as non-graduates. However, news reports that the chancellor had killed the backbench rebellion appear to have been premature.
These hardening attitudes will alarm universities. They have warned that without the extra money promised in the bill they will have to cut courses and sack staff. In its submission to the 2004 spending review next month, Universities UK is expected to present a bill for £10 billion to make up for decades of underfunding.
Russell Group universities have warned that without variable fees they may have to favour postgraduates and overseas students over home undergraduates.
Malcolm Grant, provost of University College London, said: "We would look at UCL becoming increasingly a postgraduate institution. That doesn't mean we would cut undergraduate numbers, but the business case means it would be foolish to expand home undergraduates and, if we can expand, our preference would be towards postgraduates."
But Imperial College London said it was not in the nation's interest to close the best institutions to British students.
Earlier this week, education secretary Charles Clarke set out the government's case for variable fees to Labour backbenchers.
He said that variable fees would give more choice to students, more freedom to universities and raise additional money while protecting access through the graduate contribution scheme and the Office for Fair Access.
As many as 116 MPs have signed an early-day motion put forward by Labour MP Hywel Francis that calls for fair treatment for part-time students in the forthcoming bill. The list of signatures, which is headed by Barry Sheerman, chair of the education select committee, includes Labour MPs Dennis Turner, Helen Jackson, David Chaytor, and David Hinchliffe, chair of the health select committee.
The motion congratulates universities that have developed successful access policies, welcomes the government's commitment to lifelong learning, and calls on the government to ensure that its proposed higher education bill is fair and equitable for part and full-time students.