The Government has spelled out its strong opposition to the introduction of top-up fees in a clear steer to vice chancellors.

One week ahead of the vice chancellors' meeting in London the Department for Education and Employment has issued the following warning: "The Government does not accept that public spending plans require the introduction of top-up fees which would bear unfairly on less well off students. The Committee of Vice Chancellors and Principals would be well advised to reflect very carefully on the consequences before taking any action on that option."

The warning will push vice chancellors towards cuts in student intake as a way of staving off the fierce budget cuts announced in last November's budget. In a circular issued late last year the Higher Education Funding Council for England gave institutions permission to reduce their contracted student numbers.

A spokesman for the funding council said this week: "The amount institutions could agree to surrender in number has been left deliberately open." But warned that institutions that chose to pull back numbers below the new, lower level, would be subject to clawback. He also warned that if a large number of institutions proposed drastic cuts, then the funding council would have to turn them down.

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Institutions have until February 9 to submit plans for new student numbers to the funding council - a week after the vice chancellors' meeting.

Vice chancellors reacted with incredulity to the statement on top-up fees since ministers have previously made it known that universities must decide for themselves whether to impose charges for courses above the level paid by local authorities.

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The CVCP said it had already urged all the political parties to take a longer term view, and had proposed a way forward using income contingent loans. Chairman Gareth Roberts said: "We are frustrated that the political parties lack the courage to endorse the idea. Meanwhile we must decide how to maintain standards in the light of the cuts. As the secretary of state has reminded us, universities are autonomous bodies. We can not rule out any options at this stage."

John Ashworth, director of the London School of Economics and a supporter of top-up fees, said: "This is an unseemly attempt to bully British universities which I find offensive. Gillian Shephard should know better." He also questioned the assumption of a connection between access and top-up fees since there was no supporting evidence from international comparisons.

Derek Roberts, provost of University College London, dismissed the Government's statement as "totally inadequate". He said the warning was merely evidence that the Government was scared of the consequences of vice chancellors' actions so close to an election. "I respect the Government's view that it is not in favour of top-up fees but the statement obviously is in favour of destroying the quality of higher education. They must let us know what the alternatives are," he said.

Professor Roberts has angered his students this week by arguing for a "realistic" top-up fee of Pounds 1,000 per year, a third of which he will use to increase academic salaries. "If we do introduce top-up fees we do not do it willingly," he said, adding that students could use loans to meet the cost of fees.

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Pip Page, UCL student union education officer said top-up fees would be disastrous: "This would create an admissions policy based on wealth not academic merit."

* The governing board of Teesside University this week rejected outright the notion of top-up fees. The academic board was set to discuss mounting a political campaign to highlight funding shortfalls.