Universities in Wales would charge Welsh students £1,000 a year less in top-up fees than they charge those from outside the principality under one of six options presented to the Assembly today.
Variable fees would be capped at £2,000 or £2,500 for Welsh students, but everyone else could be asked to pay up to £3,000, if the Assembly chooses option five from an array of possible fee and student-support regimes. These were devised by a review group headed by Teresa Rees, Cardiff University pro vice-chancellor.
The Rees review's interim report gives no preferred option as it sets out the pros and cons of various higher education funding systems that could be introduced in Wales from 2007.
The options also include: maintaining the status quo of a £1,200 fixed annual fee; introducing a £3,000 fixed fee plus a nationally regulated bursary scheme; and an English-style system, in which the Office for Fair Access role is taken on by the funding council or with a national bursary scheme.
The report warns that none of the options is without "weaknesses and dangers", and points out that the financial, legal and cross-border flow implications of each are "highly complex".
It says: "Some of the potential options, including ones that are preferred by some of the stakeholders, carry a range of very serious risks, not all of which are well appreciated.
"Some would impose a very heavy financial burden on the Assembly budget. Others may jeopardise the Assembly's ability to fulfil its aims of increasing access and participation of Welsh-domiciled students."
The 14-strong review group has attempted to strike a balance between the financial constraints of the Assembly, the need to plug a £50 million-a-year funding gap between higher education in Wales and England, and the needs of students.
All the options would provide new students with a means-tested maintenance grant of up to £2,700 a year from 2006.
The report says that every option except the status quo will result in a "considerable increase" in fees for part-time students.
The group's final report, in which it will present its preferred option, is expected on April 29.
* Status quo. £1,200 fixed fee. Bursaries at institutions' discretion
* £2,000 fixed fee. Bursaries available at discretion of institutions
* English competitive model. Variable fees up to £3,000. Institutions must offer bursaries to certain Welsh students
* Part-managed variable fee system. Variable fees up to £3,000. All-Wales managed scheme. Institutions also free to provide their own bursaries
* Differential variable fees. Variable fees capped at £2,000 or £2,500 for Welsh and £3,000 for everyone else. National bursary scheme plus institutional bursaries
* £3,000 fixed fee plus national bursary scheme. All fees fixed at Pounds 3,000. National bursary scheme plus institutional bursaries.