New universities in Wales fear deep cuts to their allocation of student places as a result of changes to the distribution system - even if they reduce their tuition fees as the policy intends.

It was announced last month that from 2013-14, just over a quarter of all places will be redistributed to institutions charging an average fee of less than ?7,500 a year.

At present, only Glyndwr University would qualify.

Another quarter will be allocated on the basis of Welsh government priorities such as research funding and total income, which will benefit larger research-intensive institutions, particularly Cardiff University.

One of the most likely scenarios in 2013-14 is that every Welsh institution bar Cardiff, Bangor and Swansea universities will lower their fees because they risk losing at least 20 per cent of places if they maintain charges close to ?9,000.

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Analysis by Times Higher Education shows that in this situation, the University of Wales, Newport would suffer a per cent drop in places, while numbers at the University of Wales Trinity Saint David would fall by 31 per cent (see table).

Combined with the decline in fee level, this would mean that the two institutions face a drop in overall fee income of at least 37 per cent and 40 per cent, respectively.

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If the pair do not lower their fees, they could lose about 57 per cent of their places because they would not be able to access any of those reserved for sub-?7,500 universities.

Trinity Saint David is set to merge with the much larger Swansea Metropolitan University and the University of Wales in August.

But doubt surrounds Newport's proposed merger with the University of Glamorgan and Cardiff Metropolitan University because Cardiff Met opposes the move.

In a statement, a spokesman for Newport says it is "important to take time to consider the major effect that these proposals will have on the future of individual universities, even if they choose to drop their fees in 2013".

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A Cardiff Met spokesman said the proposals "appear to recreate the binary line", a reference to the division between universities and polytechnics that existed before 1992.

He added that the changes "take no account of widening access and the student experience. They will prove counterproductive to the economy of Wales."

The spokesman argued that they could cost more than they save and said a lack of competition caused by mergers could "lower standards".

The Higher Education Funding Council for Wales stressed that the total number of undergraduate places would remain stable, with the changes affecting only their distribution.

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david.matthews@tsleducation.com.