Universities that are generous with bursary cash do not necessarily attract the most applications, a new report reveals.

Research by Universities UK on the impact of variable fees found that some of the institutions offering the best support, with bursaries for all or nearly half their full-time undergraduates, experienced among the largest percentage drop in the number of applicants between 2005 and 2006, while others saw an increase.

The report, Variable Tuition Fees in England: Assessing their Impact on Students and Higher Education Institutions , says application levels were "significantly distorted" in 2005 and 2006 because of people applying early to beat the introduction of top-ups.

Across the two years, however, institutions experienced a median increase of 10 per cent in the number of applicants compared with 2004, the report says.

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Drummond Bone, president of UUK, said: "Despite some pessimistic predictions, our report confirms the upward trend in numbers of applicants and acceptances between 2004 and 2006."

Sally Hunt, joint general secretary of the University and College Union, said: "This report shows no real progress in the Government's efforts to widen participation but does reveal pots of surplus cash in many bursaries' pools."

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Gemma Tumelty, president of the National Union of Students, said: "This report may imply that students are not letting finance interfere with their choice of institution, but this is convenient spin for an organisation that is determined to lobby for the marketisation of the sector."

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