Students would have to pay some of their course fees under an Pounds 8 billion higher education expansion plan the Liberal Democrat are considering.

The party's higher education working group has suggested fee payments may be necessary after the second year of degree programmes to help cover the cost of resuming growth without sacrificing quality.

A consultation paper to be launched at the Liberal Democrats' annual conference in Glasgow in two weeks has costings for policies which include funding places for two million students by the year 2000, restoring benefit entitlements to students, scrapping the student loans scheme, and providing comprehensive maintenance support for full and part-time students. It puts the total price of such expansion at over Pounds 7.6 billion.

The unwelcome prospect of having to add another 4p in the pound to income tax to fund more higher education has led the party's education team to conclude that students and employers might be asked to contribute more to cover the cost.

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This could be done through a national "learning bank", into which students, employers and the state might all make contributions.

Student maintenance would be means-tested and linked to the benefits system, and would not be re-payable. Both full and part-time students would be supported.

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But the costs of such a system would be so high that students would probably have to cover their own fees after their second year in higher education.

Don Foster, Liberal Democrat education spokesman, said: "Using the benefits system would be a nice, simple way of ensuring equity for student maintenance, and the learning bank idea seems an attractive vehicle for the repayment of fees."